Page last updated at 17:08 GMT, Tuesday, 25 November 2008

'Why my bank tried to evict me'

The Prime Minister is urging the banks to do their best to keep people in their homes, as the levels of housing repossessions rocket.

Sharon Amato and daughter
They would rather evict me and my children than allow me to stay and pay my mortgage
Sharon Amato

The Council of Mortgage Lenders says repossession is a "last resort" for its members.

But BBC File On 4 has found one case where it is alleged one of the country's largest mortgage lenders refused to do a deal to keep a borrower in their own house, even when a judge thought the deal made perfect sense.

Sharon Amato has been living with the dread for the past few months that she and her two children would lose their home.

Sharon, who has spent 24 years with the same employer, currently earns 33,000 annually, but her suggested solution to her mortgage arrears was rejected by her bank HBoS.

"It really, really scared me, I've tried to do what I can but I seem to be banging my head against a brick wall," she told the BBC.

Her troubles started last year when her husband gave up his job so they could open a restaurant, but it failed leaving the couple to pay rent and mortgage on the restaurant as well as the house.

'Deal refused'

Sharon had never missed a payment on the home mortgage, which was taken out in the 1990s, but began to fall into arrears.

The marriage cracked under the strain and she has been facing eviction along with her two children.

Fortunately her house is worth far more than the 150,000 mortgage.

"I said to the bank, I'm willing to carry on paying my mortgage can you put my arrears onto the end of the mortgage and extend the term."

The deal she claimed was refused by the bank would have cut her monthly payments from 1,115 to 700/800.

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She is an HBoS employee and even offered to have her payments deducted at source from her salary.

"They would rather evict me and my children than allow me to stay and pay my mortgage," she said.

Sharon set out her offer at a county court hearing in Bristol last month. File On 4 has seen the documents confirming this.

"The judge was absolutely gobsmacked, she couldn't believe it because I'm an employee, I've worked there for 24 years - I've got a good track record," said Sharon.

However unless the bank accepted her offer, the judge could not intervene.

Days before Sharon and children were due to be evicted the bank contacted her, lifting the imminent threat of repossession.

"A huge weight has been lifted off my shoulders," said Sharon.

However according to her solicitor Derek McConnell, last-minute reprieves like this are a rarity.

"It is because you (File On 4) were involved in putting it to the bank that they've decided to back down."

Mr McConnell added: "The whole thing for her was a complete fluke."

And he said there was an urgent need for reform, "Sharon's case is an ideal example of where the industry doesn't do what it says, ie negotiate meaningfully with people."

Repossession is always our final resort

"We really desperately need to have a review of the law so that the Sharons of this world could have gone to court with the decent prospect of putting together a decent deal through the court."

A statement from the bank said Sharon Amato had been in arrears for more than a year and the bank had sent 13 letters between August 2007 and March 2008 urging her to contact them.

It said the first time she had "engaged" with the bank was 29 September 2008.

The bank also claimed it had not received any payment proposals from her prior to 17 November 2008, however court records show this was not the case

"Now that we have established communication, we are working with the customer to assess the options that are available," said the bank.

The bank added: "Repossession is always our final resort, it is only ever considered when all other options have been exhausted."

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