Mixed Reactions Surround Phone Calls to UK Lender Customers

Mixed Reactions Surround Phone Calls to UK Lender Customers

Some UK lenders are setting a new precedent by checking on payments being made by borrowers after they have been approved for a mortgage loan.  The operative word here is after.  Northern Rock and Bradford & Bingley are two lenders guilty of such practices.  They are contacting 2,000 or so of their customers by phone each week and reminding them of their obligation to take care of their mortgage loan before other lifestyle choices.

In all, about 30,000 of their customers will be receiving a friendly reminder phone call.  The calls have been labeled in every way, from patronizing to fair by other lenders.  The calls are likely to become the new norm for many lenders, if Northern Rock and B & B see results from the program.

The initial reason for making the phone calls to customers was to identify those who were struggling with other debts.

Richard Banks, chief executive of UK Asset Resolution, commented on the reaction from some customers when the base rate gets hiked, saying: “Some people won’t cope when interest rates rise, but for others there are remedies. They need to think about what is their most important debt.”

The impetus behind the decision is not without merit.  The first half of the year saw 20,000 families get their homes repossessed for failure to make the mortgage payments.

Recently Melanie Bien, of mortgage broker Private Finance, commented on the lender phone calls, saying: ‘It is unprecedented. I’ve never heard of banks doing credit checks mid-way through a mortgage deal before.

“You qualify for your mortgage and then, halfway down, they are checking up on you. It is outrageous.”

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