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Arrears and debt management (Sources of advice available (Citizens Advice,…
Arrears and debt management
MCOB rules
Dealing fairly with customers
Lender responsibilities
Seek agreement
Liaise
Allow time
Permit changes
Consider options
Take possession as a last resort
Information provision
Letter of arrears
15 business days
Money Advice Service Information Sheet
List of payments missed or partly paid
Total arrears
Charges caused by arrears
Total outstanding debt. Exc. redemption charges
Future charges unless arrears cleared.
Procedure before taking possession
Written update on arrears and charges
Inform borrower to contact local authority for rehousing
State possession procedure
Marketing a possessed property
Marketing
Market as soon as possible
obtain the best price
Post-sale
Inform mortgage shortfall
MIG may purse debt
Role of the Lender
Measures
Short-term
1 or 2 mths arrears
Medium-term
Ligation with 12mths arrears
Long-term
Restructure loan over long term
Dealing with arrears
Payments of arrears over a given period (Rescheduling)
Full or partial suspension of payments
Short-term measure
Accepting interest-only payments
Extending the term
Capitalising the arrears
"One off remedy"
Surrendering an investment for repayment
Borrow against surrender value
Sell on secondary market
Trading down
State assistance for borrowers
Support for Mortgage Interest (SMI)
PV limits
Standard rules
200k
Pension Credit rules
100k
Receiving SMI and Pension Credit within 12 wks ceasing benefits
200k
Linking Rules
Ceased claim
52 wk 2nd claim no waiting period
Ceased income support claim
12 wk 2nd claim no waiting period
Ceased incapacity claim
104 wk 2nd claim no waiting period
Sources of advice available
Citizens Advice
Free advice
Money advice centres
Local authority free debt advice
StepChange Debt Charity
Free, independent and realistic advice
Financial Advisers
Chargeable
Money Advice Service (MAS)
Government sponsored free advice
Department of Work and Pensions
Benefit options