This cover won't solve everyone's financial problems, but it will at least help those who do face the threat of redundancy. Lenders have a duty of care to make this insurance affordable and easily accessible.
Braintree, Essex (PRWEB) August 13, 2008
If the number of families losing their homes to repossession is to slow down this year, lenders must reduce the cost of their Mortgage Payment Protection Insurance and ensure more customers have that financial safety net, should accident, sickness or unemployment occur, warns Simon Burgess from independent provider, British Insurance.
His call is in response to predictions from the Council of Mortgage Lenders that 45,000 homes will be repossessed in 2008. Last week the CML announced there were 18,900 repossessions in the six months up to June this year, up from 12,800 in the same period last year.
The number of mortgage holders with arrears of three months of more up to June 08 was 155,600, up by nearly a third on the 07 figure of 120,800. It is this steep rise that has yet again, prompted Burgess to urge lenders to cut the profits they make on PPI policies and do something tangible to help protect customers' homes.
He comments: "Lenders have been lambasted from all sides, the Financial Services Authority has accused them of treating customers unfairly and not helping people through their difficulties and the Citizens Advice Bureau accused them of aggressive behaviour and using court action as a first rather than last resort. Lenders cry foul and say they're doing all they can to help customers but actions speak louder than words - they've reduced their fixed rate mortgage deals, they're squeezing more money out of customers and are using 'bully boy' tactics on those who are struggling.
"If lenders had provided more affordable mortgage PPI policies that match my prices, I suspect more people would be able to keep their homes. Although not all those struggling to make repayments have lost an income due to redundancy - it is a key factor. Homeowners who lose their wage could wait up to nine months for any Government help in meeting their mortgage payments, as support has been delayed from six months. If they had PPI, they would receive back to day one payments and have their mortgage repayments met for up to a year."
Burgess fears the CML repossession statistic is conservative, but if correct, calculates that over 120 families a day will lose their homes. He concludes: "I worry far more families than this will be affected which is why lenders must act now and stop offering cover that is at least four times more expensive than mine.
"This cover won't solve everyone's financial problems, but it will at least help those who do face the threat of redundancy. Lenders have a duty of care to make this insurance affordable and easily accessible."