The call from the country’s Financial Ombudsman Service comes as new figures show that a third of people contacting the ombudsman with mortgage problems are in arrears.
The data shows that four in 10 cases are from people who say they are struggling with their payments. Increasing numbers of people concerned about losing their homes are in ‘debt denial’ and risk leaving it too late to seek help.
Lenders need to take a less ‘black and white’ approach to helping people get through difficult times, it adds.
Last year 13,659 people, the highest number recorded, contacted the ombudsman for help with a mortgage or secured loan problem. Yet a third of those people had slipped into arrears before they sought help.
Of the remaining cases, it became clear that a large number of people struggling to make ends meet felt unable to say that they were facing significant financial problems or were concerned about the impact of telling their lender of their situation.
The ombudsman has also been working with lenders to make it clear that they’re expected to get creative when helping people get back on track, especially before payments get missed. And though early signs suggest that this is having an impact, there’s still more that they can and should do to help.
Around 25,000 people contacted the ombudsman’s helpline with questions or concerns about home finance problems.
The ombudsman upheld around a third of all mortgage complaints but on many occasions, what the customer was seeking was unrealistic such as suspending payments or interest indefinitely, or writing off debt.
Of all the cases received by the ombudsman where people said they were in severe financial difficulty, half involved mortgage problems.
Typical areas of complaint included charges, repossession, sales and advice when taking out mortgage products, problems with the administration of the mortgage, upfront fees charged when a mortgage offer is declined and misleading literature.
‘Mortgages are the most significant purchase most of us will make in our lives, so we understand why people might be reluctant to say that they’re struggling to pay for their home,’ said chief ombudsman, Tony Boorman.
‘Many of the cases where people face losing their home have been heart breaking to deal with but could potentially have been avoided. So if money is tight, you should never be afraid to ask for help or guidance. Speak up sooner rather than later, there’s a lot that can be done to help before things get out of hand,’ he explained.
‘Consumers and lenders all have a responsibility to work together when problems arise. And though it pays to be realistic about the options available to you, if your lender isn’t listening, we’re here to give you practical, honest advice to help sort out your problem,’ he added.
