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Lloyds Banking Group See Customers as Fair Game

The Northern Ireland Courts and Tribunals Service have recently released figures for actions in relation to mortgage repossessions for the first quarter of 2014. For the first time in this quarter since 2010 there has been a change for the better. There has been a decline of 14.09% in actions brought before the Courts and an increase of 2.14% in the number of cases being disposed of. This means that more and more cases are being dealt with through other means; we can only assume, through mediation between the bank and borrower.

In NI, the Courts have taken a dim view on lenders, and/or their solicitors, simply progressing cases to the Court for repossession and not adhering to the Pre Action Protocol outlined by the Courts. The Protocol outlines a series of recommendations for borrowers and lenders to proactively engage as they both have a responsibility to avoid court proceedings at all costs.

In the Pre Action Protocol there are a number of forbearance options available that a lender must consider for the distressed borrower. I am of the opinion that if a proposal put forward by a borrower in distress is equitable, fair and reasonable then there is no reason why any lender should not consider agreeing to same.  I say this because, in my experience, GDP Partnership has kept local families in their homes by coming to equitable agreements with lenders.

The FCA (which regulates the main lending institutions in the UK) have issued guidelines called the "Mortgages Conduct of Business," more commonly known as MCOB. MCOB Section 13 refers to guidelines on what lenders must and/or should do when it comes to dealing with customers in arrears and in financial difficulty. It states that a lender must treat customers fairly when in arrears. This is not something the FCA thinks they should do or wants them to think about doing, but something they must do.

I want to highlight Section MCOB 13.3.2A  "A firm must, when dealing with any customer in payment difficulties liaise, if the customer makes arrangements for this, with a third party source of advice regarding the payment shortfall or sale shortfall.

It saddens me to report that one lender in particular, who are probably considered the main market provider in the UK, recently changed their internal policies to act against their regulator's MCOB regulations. They have put their policy to our office in writing and communicate it to their customers, so we feel it is appropriate to name and shame the Lloyds Banking Group. Lloyds Banking Group includes Bank of Scotland, Birmingham Midshires, Cheltenham and Gloucester, Halifax, Lloyds Bank, and The Mortgage Bank commonly known as TMB.

Borrowers do not borrow money in order to go into default or arrears; when a borrower finds themselves in this position it is a whole new arena for them and it causes many anxieties and stresses on them. It is incumbent on the borrower to ensure that they get the correct professional help and advice in order to help them through this difficult time and naturally they will obtain advice and services from third parties either paid for or free.

Mr Tony Boorman, Chief Executive of the Financial Ombudsman, has recently reported on the record number of complaints being forwarded to the Financial Ombudsman, most of which he said could have been avoided. The increase has been attributable to distressed property borrowers, many of whom are facing repossession.

GDP Partnership has been working for the last 4 years in order to level the playing field between the sophisticated bank and the unsophisticated borrower.  Due to their lack of understanding and knowledge of the financial product which they have undertaken, the Bank is exerting an unfair relationship on the borrower and exposing them to a totalitarian regime... the likes of which should not exist in the UK.

Darwin AllenComment