ITíS PAYBACK TIME FOR MPs

ITíS PAYBACK TIME FOR MPs

The MP expenses scandal might not have a name yet like all the great scandals dating back to the famous Watergate scandal.

But itís claiming victims with one Labour MP suspended, one Tory MP resigning his job and one Labour minister resigning.

And itís paying off for taxpayers with a total of £126,060.66 precisely so far paid back by MPs who admit theyíve made wrong claims. And thatís just a start with more to come.

One of the big sources of taxpayer refunds has been MPs paying back cash wrongly claimed on mortgages ñ one MP apparently forgot he had paid his mortgage off and wrongly claimed £16,000 while others have refunded capital gains tax.

Theyíve been able to find the money reasonably easily ñ which isnít case for homeowners facing repossession.

 

Surge in repossessions

The number of home repossessions soared in the first three months of the year to 12,800, according to shock figures from the Council of Mortgage Lenders.

They are 50% higher than the same three months in 2008 and around 20% up on the last three months of 2008.

If you want to look on the dark side that would seem to point to a rising tide of misery as more and more homeowners are overwhelmed by the costs of their mortgage.

However itís not quite that simple and happily not that grim.

 

The keys are in the post

Analysts say around 27% of all the repossessions were so-called voluntary repossessions where the homeowner decides to give up.

They are simply giving their keys back to their lenders as they realise their homes are worth less than their mortgages after house price falls.

In the US it is know as ìjingle mail” as that the sound the keys make when they are posted back to the lender by the homeowner.

Of course these people are potentially in debt trouble and the lenders are facing problems but they are not struggling with their mortgage payments.

 

Things might get better

The CML says it may revise down its prediction of 75,000 repossessions for the year compared with 40,000.

It now reckons that rate cuts have eased the mortgage misery and that the 75,000 prediction is looking a bit ìpessimistic”.

 

Itís not all rosy

The number of mortgage customers who are behind on payments continues to rise.

Currently around 2.39% of all loans are in arrears ñ that compares with 1.18% a year ago and 1.88% in the last three months of 2008.

And the number of mortgages still being paid has fallen sharply from 11.7 million last year to 11.1 million now. That is mainly due to people paying off their mortgages.

 

Help is at hand

Government schemes aimed at helping people stay in their homes when they are struggling to pay their mortgages are helping.

Ministry of Justice figures show the number of mortgage possession orders has fallen sharply. There were 17,054 mortgage possession orders in the first three months of the year ñ the first steps towards repossessions.

That is a startling 43% lower than the number in the last three months of 2008 and 39% down on the same period last year.

The drop is partly due to the start of a new Mortgage Pre-Action Protocol which came into effect in late November 2008.

It put in place procedures for negotiation that must be followed before the courts will consider applications from lenders for repossession of homes and makes it harder to repossess.

The Government has also introduced its Homeowner Mortgage Support Scheme which most lenders have signed up to.

 

Click on MoneyExpert.com to compare mortgages.

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