By Bob Howard
BBC Radio 4's Money Box
Borrowers shouldn't be bullied into repaying mortgage arrears too quickly, says a senior judge.
Senior County Court Judge Michael Tennant is concerned
Judge Michael Tennant, president of the Association of District Judges, says lenders often unreasonably demand repayment within a year.
But people going to court can win permission to repay over a much longer period of time.
The Council of Mortgage lenders says sometimes borrowers overestimate how much and how quickly they can repay.
Once someone is more than two months behind with their payments, the lender can apply for a court hearing. There, a judge decides how much it's reasonable for them to pay each month to clear their arrears.
Judge Tennant told Radio 4's Money Box programme borrowers should not be coerced by lenders before going to court:
"It's important for debtors to realise that in negotiating with lenders there is no reason for them to feel bullied into agreeing an unrealistic repayment schedule.
"Very often debtors will reach agreements with the lender which are hopelessly unrealistic just in order to make the problem go away."
Many lenders want arrears repaid within the year, but the court can order payments to be spread across the remaining lifetime of the mortgage. This substantially reduces the monthly payments which borrowers facing financial difficulty have to make.
Judge Tennant fears that some customers are borrowing more money to pay off their arrears and this is placing them ever deeper into debt.
Peter Tutton, a policy adviser for Citizens Advice agrees that pressure from lenders is pushing people into ill advised re-mortgage deals:
"We see people who sort of cycle down remortgage after remortgage. If lenders are in a position to help people see what they can afford and they don't do that, it drives people to much worse options."
The Council of Mortgage Lenders, which represents the main mortgage lenders, says generally it doesn't think its members are being unreasonable in how they ask for the repayment of arrears.
Michael Coogan, the CML's Director General, says customers themselves are sometimes to blame:
"It's neither in the lender's interests nor in the customers for any arrangement to fail," he said.
"I think the question is whose bullying whom, whether customers are being over optimistic about how much they can afford to try and placate the lender."
The issue is likely to grow, with CML figures predicting that the number of homes actually repossessed by lenders is set to rise by 50% next year, from 30,000 to 45,000.
Judge Tennant says if customers are also in arrears with loans which are not secured on their property, like most loans for cars or items of furniture, they must pay their mortgages first, or risk losing their home.
BBC Radio 4's Money Box was broadcast on Saturday, 24 November 2007 at 1204 GMT.