Housing
An increase of private landlords and mortgage lenders issuing possession claims on homeowners has prompted the Civil Justice Council to propose tighter regulation. The CJC is calling for a mortgage arrears pre-action protocol to be brought into force, and launches its consultation this week. The protocol aims to ensure all reasonable steps are taken to avoid litigation before the commencement of proceedings, and to encourage the exchange of early and full information about the prospective legal claim.
Under the draft protocol, lenders must inform the borrower that arrears have accrued within 15 business days, and provide the borrower with a list of missed payments and charges. Lenders must not put unreasonable pressure on borrowers through excessive telephone calls or contact at unreasonable hours, should agree affordable repayments, and should consider changing the type of mortgage by extending it or deferring payment of interest. Historically, local authorities and housing associations have issued the bulk of possession claims, but figures for the third quarter of 2007 show more mortgage arrears possession claims being issued than standard landlord possession claims.
Sir Anthony Clarke, master of the rolls and chair of the Civil Justice Council, says: “These important proposals come at a very timely juncture. The proposed protocol aims to encourage mortgage lenders and borrowers to resolve problems... without recourse to the courts. Where recourse to litigation cannot be avoided, it aims to ensure that the court system is used effectively and efficiently.”
