Northern Rock gives breather to borrowers
Nationalised bank Northern Rock pledged to wait at least six months before repossessing the homes of borrowers who had fallen behind with their mortgage.The group said as part of its ongoing commitment to work with customers who were facing repayment problems, it would formalise its policy of not taking repossession action for at least six months.
The move follows a similar pledge by Royal Bank of Scotland, which also includes NatWest, earlier this week.
Northern Rock said its existing debt management process involved working with each customer who was facing problems to try to agree an alternative debt management solution, with repossession a last resort.
It said in cases where it did take over people's homes, it had worked with customers for an average of 15 months from when they first got into arrears.
It added that fewer than 1% of repossessions currently took place after less than six months from when the borrower first fell behind with their mortgage.
Gary Hoffman, chief executive of Northern Rock, said: "We continue to work with customers facing repayment difficulties to try and agree an acceptable debt management solution and avoid repossession.
"In the vast majority of cases, where repossession regrettably does take place, we have been working with the customer for well over six months.
"We will now formalise our policy and agree not to repossess a property for a period of at least six months from the point of arrears."
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