A day in the life of TRO Ben Reeve Lewis.
The case of the Emperors New Clothes
Explanation: Tenancy Relations Officers (TRO) work for local council’s providing advice on landlord tenant law and investigating allegations of harassment and Illegal Eviction and prosecuting landlords. All names are false but the stories are true.
This week I am going into the side of my TRO work where I have to deal with mortgage companies rather than rogue landlords.
I don’t know if other TROs do mortgage work. In their enthusiasm for the Government’s Mortgage Rescue Scheme my bosses decided I would be the best person to do it, on top of my landlord/tenant stuff, and true to local authority form, I got no training. A photocopied file was simply thrust into my hands and the words “There you go mate”, graced my ears.
Ben takes on the banks
What I have discovered as I fought my way through the last couple of years shocked and appalled me. Remember I am not easily shocked, having investigated a range of stabbings and gun pullings over the years, and (just yesterday) a landlord assaulting a 3 year old girl during a lock change – and all this with a casual and foppish yawn – but I was genuinely amazed as I got to know how the banks operate in repossession cases.
I think what shocked me is that I foolishly expected large financial institutions to behave appropriately and legally. I can hear the guffaws at the back there……maybe, despite all the criticism of banks lately I am still basically naïve and believe that people try to do the right thing.
What the banks are really like
In the first few months I was myself taken in by the letters. I presumed that as the case was being handled by very large law firms and respectable high street names, that if there was a problem it was I who was misunderstanding things, rather than any wrong doings on their behalf…….time, experience and countless court appearances where the judges lost their temper with the mortgage lenders solicitors wised me up!
Almost every day I pick up new clients who are depressed, in tears, on medication, even suicidal sometimes. Its not so much the fact that they are creaking under the weight of the debts they have, but the methods that the lenders use to recover their money.
There are a range of tricks that they pull, and I do mean tricks. They all use them so consistently that you know there is method in the madness.
The correspondence scam
Take the correspondence scam. Mortgage lenders would say, not unreasonably, that it is good practice and ethical to keep borrowers up to date and informed of developments. I wouldn’t disagree with that but at the same time the weight and tenor of the correspondence completely wears people down.
The usual scene greeting me at the beginning a mortgage repo interview, is a person, hunched shouldered and baggy eyed, tipping a carrier bag full of letters onto the table, some opened, but usually the most recent crop unopened.
As I wade through them I cant keep up with the different individuals and teams that the letters come from. I am exhausted within 30 minutes so God knows what is like for the borrower. People have simply given up and are ready to throw in the towel. I firmly believe that this is the unofficial intention behind it.
This is not just me being picky. In July 2010 the Financial Services Authority fined Redstone Mortgages for a range of breaches, including sending excessive and confusing correspondence.
The missing authorisation letter scam
A seemingly small but very damaging thing my colleagues and I encounter, in almost every case, is the missing authorisation letter scam. A lender, understandably, can’t negotiate with me without the borrowers written permission. I get the client to sign an authorisation letter which I staple to my introduction letter and fire it off to the mortgage company.
Weeks go by and you hear nothing, so you phone up. The very polite person on the other end of the phone tells you that they have your introduction letter on file but no copy of the authorisation letter so they cant talk to you. When you point out that the letter had 3 or 4 staples on it (my particular tactic) they just profess to be mystified as to the reason for it’s loss and ask you to send a copy in.
Result? More delays….more delays means, more charges and fees getting added on.
If this happened once or twice I could understand it but nearly every time???? And often more than once????, with every single lender????? Its hard to believe that there isn’t an unwritten rule in there somewhere.
What Mortgage Pre-Action Protocol?
The other, most pernicious thing that they do, and I mean in 90% of cases, is simply going for repossession without looking into ways to help their borrower.
The Mortgage Pre-Action Protocol and the Mortgage Conduct of Business Rules governs how lenders should behave in repossession matters, and both state quite clearly that repossession should only be used as a last resort AFTER they have looked into other ways of saving the home.
There are a range of tools that a lender can use for a borrower, known as ‘Forbearance’ but the borrower usually doesn’t know what they are and the lender won’t tell them. I think what irks me the most, is that the depressed people I deal with don’t have to be in that situation, they have more going for them than they realise.
A typical tale from last year. Felicity co-owns a house with her retired, elderly Father. She gets made redundant and runs into mortgage difficulties. The lender issues proceedings for possession. In the meantime Felicity gets 2 jobs, working both nights and days, part time.
Her Dad is in despair and is terrified of the court so on the date of the hearing Felicity goes along on her own, totally unrepresented. The lender’s solicitor sits down to talk to her and go over her finances. She explains about the new jobs, that she has to work a month in hand for. He looks over her income and tells her that she can’t afford to pay the monthly amount, let alone a sum off of the arrears.
A possession order is made
They go in front of the judge, the solicitor explains the situation. What neither the judge nor the solicitor took into account was Felicity’s Dad’s income, which was with the court in the form of his written defence which would have proved the monthly amounts could have been covered. Judge grants outright possession.
Ben takes a hand
A day later Felicity comes in to see me, she still doesn’t even understand the possession system. She isn’t unintelligent, she is a graduate, but the legal system is so arcane and intimidating that she can’t keep up. I explain how possession works and she is horrified and tearful, suddenly realising what has just happened.
I take on the case and write to the lender…..they lose the authorisation letter. I write again…….. 6 weeks (and more fees and charges) later they start talking. I point out the numerous breaches to the procedures for possession that there are on the case, including going for possession without looking into other ways of helping their customer. I threaten a complaint to the FSA but I get nowhere.
Seven months later …
Wind forward 7 months….and that’s 7 months of interminable letters and phone calls (like banging your head against a smiling, polite wall where the computer always says “No”) Felicity has been making regular payments and I ask them to capitalise the arrears (that means swallow them up into the mortgage) they refuse, so I apply to court to have the possession order set aside on the basis that they have breached the required protocols. They send a solicitor to defend the action.
The Judge gets angry
The solicitor begins her defence and the judge cuts across her, clearly angry and asked her why the hell she was there. She was thrown for a bit and tried to mount her defence again but the judge wouldn’t hear it. He ordered her to leave the court and call the lender to find out why the banks had not been properly negotiating despite seven months of my attempts to get them to do it.
She did. The judge wasn’t satisfied and made her call again. She did. The judge again he still wasn’t satisfied and told her to make a third call. Three hours later the lender backed down, withdrew the defence and agreed to capitalise the arrears……they could have done that months before without driving Felicity and her Dad to the point of despair.
Success! But why didn’t they do this before?
The above tale is typical. You have to fight to the very end for each, tiny concession. I have learned so much in the past couple of years and I want to share that knowledge with every single person in mortgage difficulties. to let them know that they aren’t dead in the water, even if the locks are about to be changed.
Ben starts a campaign
To that end I have started a website to help share what I have picked up www.homesavingexpert.co.uk and a campaign to get mortgage lenders to treat their customers fairly. Please lend your support.
About Ben Reeve-Lewis: Ben has worked in housing in one form or another since 1987. He has variously been a Homelessness caseworker, Head of Homelessness for a local authority, a TRO and Housing law trainer. He now divides his time between doing contract Tenancy Relations work and as a Freelance housing law training consultant for the CIH, Shelter, Sitra and many more. Read more about Ben here.