Postie saved from repossession

[baldrick]

Delivered: how a housing association stepped in to prevent a repossession

In the first case of its kind, a non-profit group has bought the house of a struggling owner
and rented it back to him. By Jill Insley
The Observer, Sunday 14 December 2008

Arthur Stone, a 53 year old postman from Burton upon Trent, is believed to be the first person
in Britain to have been rescued by a housing association from having his home repossessed.

Trent and Dove Housing Association has bought back Arthur's home, which was formerly a council
house, after he fell into arrears and was taken to court by his lender.

The trauma of repossession proceedings and prolonged worries about debt drove Arthur to despair.
Trent and Dove had been talking about the possibility of buying the property for some time with
Suman Antcliffe, Arthur's adviser at East Staffordshire Citizens Advice. But the discussion was
brought to an abrupt conclusion when Arthur's colleagues notified the police that he had gone
missing, and that they were worried for his wellbeing. Arthur says 'It all piled on top of me. I ended
up down by the river.'

Last year, the Observer highlighted how Arthur, who has learning difficulties, was struggling with his
mortgage after exercising his right to buy the home he had lived in with his parents since he was 10.
He had been wrongly told by acquaintances that after the death of his parents, Trent and Dove Housing
Association would not allow him to continue renting their house.

While he originally had only a £17,000 mortgage, plus a £10,000 renovation loan, his debts spiralled out
of control and by April 2007 he owed sub-prime lender GE Money £75,000, plus £25,000 in unsecured debt
and arrears. Trent and Dove has paid £76,000 for the property out of its own funds, and chief executive
Ron Dougan has said there are two more possible rescue cases in the pipeline. But he adds that the
association can only afford to help out 10 families in total.

'We have to prioritise those who are in need - they may have a family, or be vulnerable in some way,'
he says. 'If it's a single person who has taken on a mortgage to buy a house, a loan to buy a car, and the
money is not there to pay, they would not make it to the top of the list.'

However, he hopes that the association will be able to continue helping financially distressed homeowners
through the government's mortgage rescue scheme, a £200m package to enable housing associations and
local authorities help up to 6,000 vulnerable households to fend off repossessions. The scheme is voluntary
- local authorities do not have to offer help - but more than 60 councils throughout England are fast-tracking
the set-up of mortgage rescue initiatives with the aim of taking applications this month.

The scheme enables local authorities and housing associations to help struggling homeowners by buying
their property in its entirety and renting it back to them, or by buying part of the property and entering a
shared ownership agreement, which reduces the borrower's mortgage payments while letting him or her
remain the outright owner. It will not be available to people in negative equity.

David Orr, chief executive of the National Housing Federation, says: 'The mortgage rescue scheme is a
charter saving thousands of households from the nightmare of repossession. It will mean that many
people at risk of being thrown out of their own homes will be able to turn to a housing association for help.
It will be fair, transparent and just - and will ensure that thousands of families will be spared the stress,
trauma and misery of repossession. It will, of course, be rigorously policed to ensure that only those who
are vulnerable, and have not acted recklessly, will recieve assistance.'

He adds that the scheme should help some families avoid having to approach sale-and-rent-back companies,
which are facing regulation next year by the Financial Services Authority following a critical report by the
Office of Fair Trading about their business practices: 'This will also serve to undermine those shadowy
companies making money out of people's misfortune by buying their properties at substantially less than the
going rate, then only letting them stay on a short-term tenancy basis.'

Arthur still has an unsecured loan, but is working with Antcliffe on clearing his outstanding debt, and has no
intention of borrowing any more money. He has already agreed his rent with Trent and Dove: £70 a week,
a far cry from the £708 a month he was having to pay his lender out of his take-home pay of about £270 a week.

He will no longer have to worry about repairs and maintenance or have to pay for buildings insurance.
And when he retires, if his pension is insufficient to cover the rent, he will be able to apply for state help.
'It's a big relief,' he says.

[TrueBlueTerrier]

Excellent - see they are caring people out there.