House Repossession and Banks Ethics

By December 23, 2008House Repossession

It is clear that house repossessions are on the increase and that banks are forced to repossess many homes.

In many clear cut cases the bank has no choice but to repossess their clients’ homes.

However some individuals are having their houses repossessed or loan withdrawn, even though they have not missed a mortgage repayment. There is a clause in many mortgagees contracts which allows banks to take this action. Unless there are extenuating circumstances this seems completely unfair.

Especially considering that the government and tax payers have helped the banks from falling into bankruptcy by providing them with substantial loans. In return the government has promised tax payers that banks will only repossess houses if there is no other alternative.

To us it appears that banks are becoming risk adverse and will withdraw the mortgage if there is a small to moderate chance that the mortgagee will not be able to repay their mortgage. Then they will not hesitate to repossess your home.

When the economy was strong banks would be prepared to take huge risks to sell more mortgages. Now it seems they are paranoid about house repossession.

It may be legal for a bank to repossess someones home even though they have not missed a mortgage repayment but is it ethical?