Wednesday 21st November 2007
Northern Rock is quick to repossess properties if mortgage holders fall behind with their repayments.
Such is the contention of financial charity the Consumer Credit Counselling Service (CCCS).
Malcolm Hurlston, chair of the organisation, tells the Guardian: "Northern Rock is one of the least charitable on the high street.
"It says borrowers are treated fairly, but that simply doesnt fit with our experience."
According to the CCCS, Northern Rock is among the lenders which most aggressively pursue their customers if they develop arrears.
Meanwhile, defaulting on personal loans, rather than mortgages, may not be an effective solution for Britons who cannot cover all of their monthly outgoings.
While a personal loan is typically not secured against property, the lender may apply a charge on the borrowers home for up to 100 per cent of the amount taken out.
This could mean the property is put at risk in spite of the fact that the loan is often said to be unsecured.
CCCS spokesperson James Ketchell recently warned that consumers could be facing elevated mortgage costs in light of the credit crunch.
"There is a risk that people on cheap fixed-rate mortgages will in the future be forced on to more expensive products," he explained.
"It all depends on when peoples fixed-rate mortgages come to an end," he added, noting that the increases in interest rates are likely to mean the products available for such individuals to switch to are less financially favourable.
But he suggested that other areas of spending, such as leisure activities, are most likely to see reductions in consumer expenditure.
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