House repossession figures up 50%

The rise in home repossessions are worrying  through a lot of reasons, one is that the CML only record first charge holders, they do not include secured loan companies that are second or third charge holders, they also have no idea how many homes have been sold on the sale and rent back scheme.

Sale and rent back is where the current property owner sells the property to another person or firm to prevent the home being repossessed. After the sale the seller then usually remains in the property, albeit being owned by someone else, and pays rent, so in effect becomes a tenant.

It is estimated by the Financial Services Authority (FSA) that some 50,000 of these homes have been sold under this scheme over the past 'few' years and I believe that about 20,000 to 25,000 of these have been sold during 2008 alone.

Another point is that it takes between up to a year to have a home repossessed, therefore the figures released are based upon old data when the economy was a little stronger.

With unemployment figures expected to reach 3 million by the end of the year then this will only add to the repossession figures. That is why I feel it is only spin, together with 'sale and rent back', that is masking and distorting the true state of the housing market.

I have written an article 'out of the blue' which explains about how long lenders have to pursue a borrower for a mortgage shortfall following the forced sale after the repossession. Some of you will be astounded by the length of time they can chase the debt.

Bankruptcy fees

I have just received a letter from The Insolvency Service, on behalf of the Prime Minister, which offers no help for the consumer struggling to raise the cost to self petition bankruptcy. The fee payable per person is now £510 up £15, from April this year.

I am asking the PM to take decisive action in helping consumers that cannot afford the bankruptcy fee and to announce a waiver for six months on the cost to help those stuck with huge debts and suffering unnecessary.

I have today written to The Insolvency Service asking them to reconsider their decision, copied in both David Cameron and Nick Clegg in the hope they will help out and see that something needs to be done to help consumers struggling with debts whereby the only option left is bankruptcy. A copy of this letter will be on the site next week.

You can view all the correspondence so far here.