Ombudsman urges UK homeowners with mortgage debt to seek help sooner

May 16, 2014

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By Lucy Palmer-Richeson
16th May 2014

The Financial Ombudsman Service (FOS) has urged homeowners in the UK who are struggling to repay their mortgage to stop being in denial and seek help sooner rather than later.

The FOS claims that of all the cases received by people who said they were in severe financial difficulty in 2013, half involved mortgage problems, with 4 in 10 calls coming from people struggling to repay their monthly payments.

The ombudsman fear more and more people concerned about losing their homes are in ‘debt denial’ and risk leaving it too late to seek help.

According to Tony Boorman, chief ombudsman: “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.

“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 said.

“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.

The Ombudsman called on lenders to get creative in supporting their customers, rather than taking a ‘black and white’ approach to help customers get through difficult times, and for it to be done before payments get missed.

In 2013, 13,659 people contacted the ombudsman for help with a mortgage or secured loan problem. A third of these had already fallen into arrears before they sought assistance.

Of the remaining cases, the FOS said many were unable to face the fact that they were struggling, or were worried about the repercussions of informing their lender.

The ombudsman said that people need to remain realistic, stating that with some of its calls what the customer was seeking was not possible, such as suspending payments or interest indefinitely, or writing off debt.

This news adds to the concerns of those who suggest the UK is already in the grip of a housing bubble, and the worry that homeowners are already overextending themselves.