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August 13, 2008 ( PowerHomeBiz ) -
London, United Kingdom
-- If the number of families losing their homes to repossession is to slow
down this year, lenders must reduce the cost of their Mortgage Payment
Protection Insurance and ensure more customers have that financial safety
net, should accident, sickness or unemployment occur, warns Simon Burgess
from independent provider, British Insurance.
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His call is in response to predictions from the Council of Mortgage
Lenders that 45,000 homes will be repossessed in 2008. Last week the CML
announced there were 18,900 repossessions in the six months up to June this
year, up from 12,800 in the same period last year.
The number of mortgage holders with arrears of three months of more up to
June 08 was 155,600, up by nearly a third on the 07 figure of 120,800. It is
this steep rise that has yet again, prompted Burgess to urge lenders to cut
the profits they make on PPI policies and do something tangible to help
protect customers' homes.
He comments: "Lenders have been lambasted from all sides, the Financial
Services Authority has accused them of treating customers unfairly and not
helping people through their difficulties and the Citizens Advice Bureau
accused them of aggressive behaviour and using court action as a first
rather than last resort. Lenders cry foul and say they're doing all they can
to help customers but actions speak louder than words – they've reduced
their fixed rate mortgage deals, they're squeezing more money out of
customers and are using 'bully boy' tactics on those who are struggling.
"If lenders had provided more affordable mortgage PPI policies that match
my prices, I suspect more people would be able to keep their homes. Although
not all those struggling to make repayments have lost an income due to
redundancy - it is a key factor. Homeowners who lose their wage could wait
up to nine months for any Government help in meeting their mortgage
payments, as support has been delayed from six months. If they had PPI, they
would receive back to day one payments and have their mortgage repayments
met for up to a year."
Burgess fears the CML repossession statistic is conservative, but if
correct, calculates that over 120 families a day will lose their homes. He
concludes: "I worry far more families than this will be affected which is
why lenders must act now and stop offering cover that is at least four times
more expensive than mine.
"This cover won't solve everyone's financial problems, but it will at
least help those who do face the threat of redundancy. Lenders have a duty
of care to make this insurance affordable and easily accessible."
British Insurance's cover starts at £1.60 per £100 per month and further
information on Mortgage Payment Protection Insurance can be found at
www.britishinsurance.com
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