closer working with the debt advice industry is very important;
engaging with borrowers as they plan ahead to anticipate
problems and addressing overall indebtedness.
“But one of the biggest challenges is demonstrating in
tangible terms the added value delivered by debt advice.
With two-way information flows, there is the potential for
lenders and debt advice providers to better monitor
Profile
The Council of Mortgage Lenders represents banks,
building societies and other lenders who provide
around 95 per cent of all UK residential mortgages.
There are 11.2 million mortgages in the UK, with loans
worth over £1.2 trillion.
effectiveness and evolve their approaches accordingly.
“If the lender feels they have control over the referral of a
customer to a debt advice serve, outcomes can be monitored
thereby making the system more effective. So Payplan, for
example, has a secured lender referral process allowing lenders
to monitor the outcomes of agreed solutions. The new year also
brings new challenges for lenders and advisors in terms of the
safety net for mortgage customers in financial difficulty.
“The Mortgage Rescue Scheme in England will close to
applications at the end of March 2014. Although the scheme
forbear for nine months if there is no change in the customer’s
circumstances. We will be looking to join forces with advice
agencies in pushing for an extension to the more favourable
waiting period.
“And, as part of wider welfare reform, the move towards
Universal Credit will pose challenges as claimants migrate
across from legacy benefits. Thankfully, SMI will remain
largely unchanged, with payments continuing to be made to
the lender. However, the impacts of the new ‘zero earnings
was costly for government to deliver, it did directly prevent
rule’, which will see those Universal Credit claimants working
more than 5,000 possessions with thousands more
sparingly lose SMI payments, are untested.
customers compelled to seek free, independent debt advice.
With no replacement scheme in the offing, some lenders may
consider their own alternatives to possession, including
supported sales.
“Responding to all of these challenges is something in
which we all have a vested interest –