Repossession good for you (not!) - Friday 12 February

Inexcusable statement from Labour's Housing Minister - John Healey whilst talking on BBC Five Live radio show: "It can, in fact, in the circumstance be the best option for them to allow their home to be repossessed."

Please don't take this idiot's statement at face value.  Whilst it is true that in very extreme and complicated circumstances repossession can be the best bet, for the majority of people repossession should be avoided.

What people don't realise is that once your house has been repossessed, you are still responsible for the monthly mortgage and bill payments until your lender has sold the property.  If your lender doesn't sell the property within 30 days then they can sell it for whatever price they wish simply to get their money back.

Also, people don't realise that after repossession your lender can chase you for 12 years (6 in Scotland) for any shortfall, and add interest.  If a respossessed property is sold via auction you could quite easily have £20,000 of litigation, procedural and sales costs added to your bill - all of which have to be paid from the eventual sale price of your property.

We know of a case where someone had a £50,000 shortfall after repossession, then 11 years and 11 months later the lender demanded over £100,000 from the person and forced them to sell their new house to pay for it - yet again making them homeless.  Clearly, for them, repossession was not a good solution!

Furthermore, the long-running psychological effects of repossession, especially upon children, can be significant according to various studies.

Sale and Rent Back solutions are now regulated by the FSA, so firms like ours can help save your home from repossession by allowing you to sell your house to clear debts but you carry on living there by renting it back.  Once your financial circumstances have improved, there will be a possibilty for you to buy back your house.