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Mortgage lenders should be supportive, says AMI - 13/12/2007

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The Association of Mortgage Intermediaries (AMI) has called for lenders to be sympathetic to homeowners in mortgage arrears next year.

Borrowers emerging from fixed-rate deals in 2008 are set to face a payment shock in a climate of higher rates, the AMI noted, which combined with lending restrictions could create a difficult situation for prospective remortgagers.

"Borrowers who are coming out of fixed-rate mortgages may find the sudden hike in payments a huge shock and suffer financial strain as a result," said Chris Cummings, director general of the AMI.

He added that lenders and intermediaries should work together to support clients and prevent them entering into financial hardship and possible repossession.

A culture of "unmanageable debt and home repossession" would be harmful to the wider economy, the director general said.

His comments come after the release of a report from Citizens Advice blaming the subprime mortgage sector - and the government's failure to regulate it - for the financial hardship faced by homeowners in mortgage arrears.

Commenting on the report, Louise Cuming of moneysupermarket.com said that mortgage lenders could be more sympathetic to such consumers, citing the practice of charging for financial advice as evidence in support of Citizens Advice's claim.

© Adfero

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