February 15, 2010
Secured Debt Lenders Predict More Repossessions
Secured debt lenders think that there are going to be more repossessions in 2010 as more people fall behind with their payments for mortgages, loans and other debts.
According to Moore Blatch, 67% of mortgage lenders and foreclosure experts are predicting an increase in the number of repossessions in 2010. They think that more people will simply be unable to keep up with paying their bills and the lenders will have no other choice but to take the property.
Of those who are predicting an increase in repossessions, 50% believe repossessions will rise by as much as 5%, while 17% believe a rise of as much as 15% and a further 6% foresee a rise in repossessions of over 15%. They think that growing debts will be the main reason for repossession, but unemployment and the possibility of rising interest rates may play their parts too.
But there are not all as pessimistic – more than a quarter of lenders thought there would be no change in repossessions in 2010, while 6% believe there will be a decrease.
Paul Walshe, head of lender services, Moore Blatch says: “The Council of Mortgage Lenders revised, and subsequently lowered their 2009 predictions for repossessions to 48,000 in 2010. However, much of this fall was due to the the Government’s initiative to provide consistency in lenders’ approach to repossessions. This created a bottleneck which will start to clear in 2010.
“Sadly, the underlying cause of repossession, being excessive borrowing, is still causing people to default on their mortgages.”
If you are struggling to pay your secured debts, you must talk to an expert right away. The lenders might be right and more people might not be able to handle rising rates, fees, penalties and short-term debt pressures. Do what you can now before you find there is no way back.
SOURCE: Moore Blatch, 10/02/10
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