Mortgage lenders get tough with tardy payers

Mortgage lenders are getting tough with borrowers who fail to keep up with repayments. There were 20% more court actions against home owners in the first quarter of 1999 than in the same period last year, according to the lord chancellor's department, which monitors county court activity.

The National Association of Citizens' Advice Bureaux (Nacab) said it was not surprised by the figure. A spokeswoman said CABs receive an average of 10,000 inquiries related to mortgage arrears each month, but found lenders are becoming more willing to go to court over such matters. "Lenders now tend to move pretty quickly to court action even when borrowers are very little in arrears," she said.

The actions entered by lenders are the first stage of legal proceedings to have borrowers evicted in anticipation of repossessing their homes. However, these do not necessarily translate into repossessions.

Chris Sonne at Halifax, Britain's largest mortgage lender, said: "From our point of view, we've not seen any increase in possessions." He suggested the increase might be inflated by cases where lenders use court actions to put pressure on borrowers, then suspend the action only to resume it the following month if repayments have not been made. This would lead to cases being counted twice by the county courts.

The Council of Mortgage Lenders (CML) said it was bemused by the news. Figures for the number of repossessions are calculated twice a year. Those for the period covered by the LCD's figures are not available until the end of July. However, a spokesman said the rise was not borne out by anecdotal evidence from lenders.

Nationwide building society reported a small increase in the number of actions it had taken against borrowers but said that was to be expected in the period after Christmas. Borrowers gain an informal amnesty over the festive season.

Figures from the CML yesterday showed that Halifax remains the country's largest mortgage lender. Barclays Bank suffered the biggest drop, moving from sixth place to number eight, while Leeds and Holbeck moved up six places to 23rd.