A new legal protocol designed to encourage more communication between mortgage lenders and borrowers falling behind with their repayments has succeeded in cutting the number of homes being repossessed in Shropshire, according to a leading residential property litigation lawyer.

Andrew Verlander, an Associate in the litigation department of Shropshire law firm FBC Manby Bowdler LLP, said that an annual reduction of 12 per cent in the number of house-owners in Shropshire who have had their homes repossessed shows that the Mortgage Pre Action Protocol introduced in October last year is working.

Positive effect

“The latest repossession figures from the Ministry of Justice show that the Mortgage Pre Action Protocol is having a positive effect.”

It sets out clear guidance on what the courts expect lenders and borrowers to have done prior to a claim being issued,” says Mr Verlander, who acts for a number of Midlands-based building societies, as well as borrowers who are threatened with repossession.

“The main aim is to ensure that lenders and borrowers act fairly with each other in trying to resolve any matter concerning mortgage arrears.”

It also encourages more pre-action contact between lender and borrower in an attempt to seek agreement before the matter goes before the court.”

Lenders now have to prove to the court by way of a checklist that they have taken all the possible actions in the new protocol.

If the borrower cannot confirm that all the actions have been taken, then the court may suspend or strike out the proceedings or make a costs order against the claimant.

“As a result fewer claims for repossession by lenders are coming to court, but those that do are much more likely to be successfully approved,” says Mr Verlander.

With 40 qualified staff in offices in Shrewsbury, Telford and Bridgnorth, FBC Manby Bowdler is one of the largest law firms in Shropshire.