A NEW investigation has revealed that hundreds of people were brought before the courts for mortgage possession cases, in the months after a ban on the enforcement of home reposessions was lifted.

Led by the Bureau of Investigative Journalism, The National helped analyse court hearings across Wales and England as pandemic protections for homeowners came to an end.

More than 300 mortgage cases were analysed by the Bureau, as well as 115 that reporters witnessed in person.

Earlier this year, the Financial Conduct Authority warned that repossessions should only happen as a “last resort”, and lenders should "consider carefully the potential impacts on customers of possession proceedings and consider whether it is appropriate to commence or pursue repossession proceedings, including taking possession, in a particular case at this time".

But the Bureau's investigation revealed that of the 115 cases witnessed by reporters, the impact of Covid-19 was raised in the courtroom in nearly one-in-three hearings. In many cases, the lender was granted an outright possession order anyway.

Some were being pursued for just a few hundred pounds, despite explicit guidance from the FCA and commitments from the UK Government that “no-one should lose their home because of the pandemic.”

In nearly half of the 115 cases witnessed in-person during the investigation, hearings ended with an outright possession order, allowing the mortgage lender to evict the homeowners. A further 30 per cent of hearings ended with a suspended order, meaning the homeowners were at risk of eviction if they fell behind on payments again.

It took just nine minutes on average for the courts to decide on imposing a possession order, and the average homeowner appearing before the courts was £7,900 in mortgage arrears. In eight out of 10 hearings, the homeowner had no legal representation in court, and in nearly as many cases, the defendant (homeowner) did not turn up.

Today's findings, on mortgage possession cases, follows on from our initial feature on the extent of similar hearings against tenants after government pandemic protections for renters were lifted.

You can read more about the situation for renters brought before the courts here.

The Bureau investigation also analysed 342 mortgage cases at 10 of the busiest possession courts in Wales and England, between June and September.

In Cardiff, nearly one-in-four possession cases heard in those months were for mortgage holders. And like in five of England's busiest possession courts over the summer, Bank of Scotland was the most common claimant among mortgage lenders in Cardiff.

Bank of Scotland was the claimant in eight of 26 Cardiff cases analysed by the Bureau. That lender is part of the larger Lloyds Banking Group, which was the claimant in 13 of the 26 mortgage cases heard at Cardiff.

Across the Bureau investigation, Lloyds Banking Group brought a disproportionate number of claims, and made up 38 per cent of all the mortgage lender claimants in the 10 courts, despite making up 20 per cent of the mortgage market.

Lloyds Banking Group said: “We will do everything we reasonably can to support [customers] and only after we’ve exhausted all other options would we seek a possession order.

"We firmly believe repossession is a last resort. By working together, for every 100 customers who face difficulty, over 99 remain in their homes."

In some cases, mortgage lenders wanted the proceedings to remain secret. The Bureau recorded multiple incidents of lawyers – acting on behalf of mortgage lenders – asking for the investigation's reporters to be excluded from hearings, including 12 instances with lawyers acting for Bank of Scotland. 

Additionally, the finance industry’s trade body, UK Finance, raised concerns about our attempts to log details of these cases, by contacting one of the Bureau’s funders, as well as some top officials in the justice system.

They cited “nervousness amongst mortgage lenders given the reputational risks” of scrutiny of these hearings.

UK Finance said: “UK Finance did not object to journalists attending court proceedings, nor did we ever seek to have them excluded from court.

“All the communication we had with either the Bureau of Investigative Journalism or the courts was solely to seek clarification on the nature of the work and to offer our assistance if required.

"UK Finance offered its full support to the Bureau of Investigative Journalism during its investigation, including use of our industry data, which shows very low levels of possessions.”

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