ROOF Blog

A subprime lender has agreed not to repossess for at least six years the home of a man who fell into arrears in what is believed to be the first legally binding deal of its kind in the UK.

Blemain Finance, an arm of the Blemain Group, reached the agreement in a High Court case with Peter Bentley, a carpenter from Bridgend who had lost wages as he cared for his sick father.

The deal is the latest victory by aggressive personal claims companies that are taking on companies responsible for a spate of lending during the credit boom to households that are now struggling to repay.

Personal insolvencies continue to rise, with almost 100,000 in the year to September.

Carl Wright, of Cartel Client Review, the Manchester-based personal claims company, which took Mr Bentley’s case, has been using a clause in the 1974 Consumer Credit Act to argue that many lenders have an ‘unfair relationship’ with uninformed consumers, who often sign up for loans they can ill-afford and which carry heavy penalty charges.

Northern Rock has had its busiest quarter as a mortgage lender since the credit crunch two years ago, lending £1bn in the three months to the end of September.

But the nationalised lender, which is to be split into a ‘good’ and ‘bad’ bank before being sold off, is continuing to suffer a rise in the number of customers falling behind on their mortgage payments.

In the third quarter 4.11 per cent of its mortgage customers were three months or more late on their repayments compared with an industry average, compiled by the Council of Mortgage Lenders, of 2.42 per cent.

The lender blames its problems with arrears on the Together product sold by the previous management which allowed customers to borrow up to 125 per cent of their value of their home.

Northern Rock chief executive Gary Hoffman stressed that the bank was trying to avoid repossessing the homes of customers facing payment difficulties:

‘We continue to invest a lot of effort in our approach to debt management and to providing the best possible support we can in all circumstances’, he said.

The UK could be home to almost 750,000 illegal immigrants, following an estimated rise in their numbers since 2001, a Home Office study for London mayor Boris Johnson has said. Mr Johnson has called an amnesty for many of them ‘morally right’, although the government has warned that it would become a ‘pull factor’ for more immigrants. The study looked at the economic impact of an amnesty for illegal immigrants and estimated that if a minimum of five years’ residence in the UK was required to qualify, 450,000 illegal immigrants could be granted amnesty.