Baines & Ernst News

Pearson noted �Despite the recent Council of Mortgage Lenders, (CML), Guidance on arrears and possessions, too many mortgage lenders still appear to be initiating court action to repossess the property when there are only 3 months arrears on the mortgage account. All too often lenders ask our customers for repayment of any mortgage arrears over a very short time period, such as 6 months. For many borrowers this short term arrangement is simply unsustainable and leads to further default.�

He continued �We think that mortgage lenders must adopt a more realistic and sensitive approach to their handling of arrears cases and allow repayment of arrears over a more reasonable time period. The CML has already suggested in their recent guidance to members this can be the remaining term of the mortgage. We find it hard to comprehend why lenders are still insisting on taking such a short term approach to the collection of mortgage arrears, given that increasing the number of repossessions only exacerbates the fall in house prices.

Mr Pearson noted �Lenders short term approach can lead to some borrowers feeling their situation is hopeless and deciding to abandon their home, resulting in a so called voluntary repossession. We would urge lenders to take a longer term approach to the repayment of mortgage arrears. The present rush to repossession by some lenders, particularly those who specialise in sub prime mortgages, is leaving many repossessed homeowners with substancial mortgage shortfall debts which the lenders then have 12 years in law to recover.  Based on information we have recently been made aware of, the average mortgage shortfall debt owed by former homeowners is currently around �45,000.�

Pearson continued �Despite the current low interest rates, we anticipate that as unemployment rises, the number of people seeking mortgage arrears advice from Paymex will continue to increase over the coming year. Most of the clients who contact Paymex for advice also have very substancial unsecured debts in addition to their mortgage arrears and they benefit greatly from our holistic approach to dealing with their debt problems.�

Notes:

Background:

a). On 22^nd October 2008 the Council of Mortgage lenders issued new mortgage arrears and guidance to its members. (see http://www.cml.org.uk/cml/media/press/1965%20- ). This guidance included advice to mortgage lenders that a reasonable period to clear any mortgage arrears can be up to the remaining term of the mortgage.

b). The Council of Mortgage lenders and Ministry of Justice will be publishing statistics on mortgage arrears and repossessions for the 3^rd quarter of 2008 on Friday 21^st November at 9am.

About Paymex Group:

• Paymex Group Ltd is one of the largest providers of financial solutions in the UK;

• Over the last 10 years we have helped over 130,000 people to get their finances under control;

• Baines and Ernst, Blair Endersby and Buchanan Roxburgh are currently helping over 30,000 customers to repay debts to their creditors through debt management plans, Individual Voluntary Arrangements or Protected Trust Deeds;

• We have distributed over �1/2 billion to creditors;

• We broadened our debt solutions portfolio with  Buchanan Roxburgh and Baker Evans;

• We branched out into further financial services with Easycall Finance and Evolution.

For more information about Paymex see www.paymex.co.uk

For further information contact:

Nick Pearson

Director of External Affairs

Paymex Group

Lloyds House

Manchester

M2 5BE

Telephone:        0161 216 8107

Mobile:             07958 741 267

Fax:                  0870 094 1923

Lenders still need to do more to help mortgage borrowers in arrears

The Paymex Group, one the UK�s largest commercial providers of financial solutions products, has seen a dramatic increase in the number of new customers who have mortgage arrears. Commenting on the anticipated increase in mortgage and possessions, Nick Pearson, External Affairs Director at Paymex, said �Looking at our statistics for the 3^rd quarter of 2008 compared with the 3^rd quarter of 2007, Paymex has seen a very significant increase in the number of new customers with mortgage arrears. The number of people we have advised who have mortgage arrears has increased by some 76% over the last year. The average level of mortgage arrears is now just under �2900.�

Pearson noted �Despite the recent Council of Mortgage Lenders, (CML), Guidance on arrears and possessions, too many mortgage lenders still appear to be initiating court action to repossess the property when there are only 3 months arrears on the mortgage account. All too often lenders ask our customers for repayment of any mortgage arrears over a very short time period, such as 6 months. For many borrowers this short term arrangement is simply unsustainable and leads to further default.�

He continued �We think that mortgage lenders must adopt a more realistic and sensitive approach to their handling of arrears cases and allow repayment of arrears over a more reasonable time period. The CML has already suggested in their recent guidance to members this can be the remaining term of the mortgage. We find it hard to comprehend why lenders are still insisting on taking such a short term approach to the collection of mortgage arrears, given that increasing the number of repossessions only exacerbates the fall in house prices.

Mr Pearson noted �Lenders short term approach can lead to some borrowers feeling their situation is hopeless and deciding to abandon their home, resulting in a so called voluntary repossession. We would urge lenders to take a longer term approach to the repayment of mortgage arrears. The present rush to repossession by some lenders, particularly those who specialise in sub prime mortgages, is leaving many repossessed homeowners with substancial mortgage shortfall debts which the lenders then have 12 years in law to recover.  Based on information we have recently been made aware of, the average mortgage shortfall debt owed by former homeowners is currently around �45,000.�

Pearson continued �Despite the current low interest rates, we anticipate that as unemployment rises, the number of people seeking mortgage arrears advice from Paymex will continue to increase over the coming year. Most of the clients who contact Paymex for advice also have very substancial unsecured debts in addition to their mortgage arrears and they benefit greatly from our holistic approach to dealing with their debt problems.�

Notes:

Background:

a). On 22^nd October 2008 the Council of Mortgage lenders issued new mortgage arrears and guidance to its members. (see http://www.cml.org.uk/cml/media/press/1965%20- ). This guidance included advice to mortgage lenders that a reasonable period to clear any mortgage arrears can be up to the remaining term of the mortgage.

b). The Council of Mortgage lenders and Ministry of Justice will be publishing statistics on mortgage arrears and repossessions for the 3^rd quarter of 2008 on Friday 21^st November at 9am.

About Paymex Group:

• Paymex Group Ltd is one of the largest providers of financial solutions in the UK;

• Over the last 10 years we have helped over 130,000 people to get their finances under control;

• Baines and Ernst, Blair Endersby and Buchanan Roxburgh are currently helping over 30,000 customers to repay debts to their creditors through debt management plans, Individual Voluntary Arrangements or Protected Trust Deeds;

• We have distributed over �1/2 billion to creditors;

• We broadened our debt solutions portfolio with  Buchanan Roxburgh and Baker Evans;

• We branched out into further financial services with Easycall Finance and Evolution.

For more information about Paymex see www.paymex.co.uk