John Healey - Extra legal help for struggling homeowners

Published	22 June 2009

Housing Minister John Healey today announced more help for families facing repossession of their home with the doubling of extra funding for free, on-the-spot, legal advice in courts.

The announcement came as the Council of Mortgage Lenders (CML) announced they had revised their forecast of repossessions for 2009 downwards from 75,000 to 65,000. The CML said a range of government and industry initiatives mean that more people are making contact with their lenders and in most cases getting help.

Since last summer the extra Government cash for an additional 76 court desks has meant there is free on-the-day legal advice and representation for people facing repossessions or eviction hearings available in all parts of England.

"It is real backstop help for those closest to the point of losing their home," explained Mr Healey, "All's not lost, even in court. In four out of five cases, the court desk advisers stop immediate repossession or eviction. Over the last year we've seen this work to help people keep their homes, so I'm doubling the extra money to support this service to £1.5million."

Free legal advice and representation through court desks is just one of a range of help measures introduced by Government to protect people's homes. It has a proven track record in preventing immediate repossession action when people attend court.

"Court is close to, but not the end of the line," said Mr Healey, "And the Government has put in place help at each step before that to help prevent repossession." More than 200,000 families each month are getting help with their mortgage interest or getting free Government funded advice from their local council.

Lenders must now treat customers fairly, using repossession as a last resort. The Government has also put in place a special schemes for some of the most vulnerable, elderly and disabled people at risk of having their home repossessed.

Recent Ministry of Justice figures for the first three months of 2009 show a forty per cent drop in lenders bringing repossession claims to court.

Mr Healey added:

"I think these figures show that help we're trying to give families at every step of the way is helping people avoid losing their home. But while the risk of repossession remains high and people fear for their homes we will do whatever we can to offer help. So if your case does get to court you should attend as help will be available.

"Our message is clear people in difficulty should speak to their lender as we have strengthened protections for homeowners. Lenders can only repossess homes as a last resort. If a solution can't be found then seek free independent advice."

Notes to editors

If people are struggling with their mortgages, Government is providing help to stop the problem early:

They can get free help at Courts - universal access to advice desks is now available in Courts across England, providing free, on-the-day legal advice and representation to people facing repossession or eviction hearings.
They can get debt advice - Government has invested over £130 million in free face to face debt advice between 2006 and 2011.
They will be treated fairly - FSA regulation of lenders and safeguards through the Courts ensure that customers are treated fairly and repossession is only ever a last resort.

For people in different circumstances we are providing targeted support schemes to help them reduce their mortgage payments to a level they can afford. These include:

Support through the benefits system, Mortgage Rescue and Homeowners Mortgage Support.
- Support for Mortgage Interest (SMI) - 220,000 households benefited from SMI in 07-08. We expect up to 10,000 extra household to benefit from changes to SMI rules introduced in January 2009 over the next two years.
- Homeowners Mortgage Support (HMS) - We know that more that 17,000 households have looked at information on Homeowners Mortgage Support and other advice on preventing repossessions in the last three weeks
Mortgage Rescue (MRS) - By end April, over 130 households had benefited from action through the Mortgage Rescue Scheme to stop the immediate threat of repossession, with a further 240 households in the assessment stage. Every month since launch in January, over a thousand households struggling with their mortgage have received free advice from their local authority. We are now focussing intensively on ramping up take-up and accelerating processing times
Help from local authorities - £20 million fund is now with local authorities to enable them to offer households small loans to help prevent repossession or eviction.