Sub Prime Lender Kensington Pulls No Punches in Home Repossessions

In the last few weeks we have had numerous calls from desperate homeowners who have gone to court to try and make an arrangement to pay off their mortgage arrears and ask the judge to suspend a possession order.
Kensington Logo
All of these callers have said the same thing.

The Judge asked the lender’s solicitors to speak to their client (the lender) to be lenient and agree a repayment plan. The answer comes back – a resounding ‘No’. The lender will only accept full arrears paid or repossesssion.

When asked the question ‘Who is your lender?’ the answer in 99% of cases has been Kensington.

Kensington are well known on the online forums for their heavy handed tactics and the huge charges they add as soon as a borrower misses a payment.

This sudden rise in calls for help regarding Kensington repossessions seems to suggest that maybe Kensington are looking to get as much cash back from their borrowers as possible before house prices (and their asset values) tumble.

After all, when faced between paying high inter bank interest for their money or bringing in cash from troubled borrowers via repossessions (and charging them high fees for the privilege) which would they choose?

The fact is that if you must borrow from a sub prime lender then read the small print carefully and make sure you can stick to the monthly payments – the consequences of not doing so are ever more likely to result in your home being repossessed.

Repossessions Up 70%, But News Gets Worse For Owners After Repossession

Not only are we seeing a rise in repossessions this year, unprecedented since the ealry 1990s, but unlike the last repossession wave, many lenders are themselves now in financial trouble.

What does this have to do with those facing repossession?

Well, the answer is that not only are lenders pursuing repossession of those with mortgage arrears with an intensity not seen before, but many are also doing their best to speed up the disposal process once the property has been repossessed to the detriment of those repossessed.

This means that even those homeowners who have been repossesed and are expecting to receive a cash lump sum after the disposal of the sale can find themselves still owing money as the lenders rush to dump houses via the auction system, before what many are seeing as an impending house prices crash.

We recently had a case where the lender Kensington, had repossessed the property of Mr & Mrs L, in Birmingham, and despite Mr L having lined up a buyer who was ready and willing to pay a decent price for their 3 bed semi, Kensington disposed of the property (seemingly via their internal estate agency, although we cannot be sure) for the exact sum that the couple owed on their home.

Coincidental? Maybe not.

The Ls were expecting to receive at least £20,000 after the repossessed house was sold at auction, even taking into consideration a quick sale was needed. This merely highlights the problems that many home owners face with repossession.

We always advise clients that it is better for them to arrange a sale, even at an under value, than to allow the home to be repossessed by the mortgage lender, simply because in this way they are able to make some key decisions regarding the sale process.

Importantly, they can choose who to sell to, for how much (within reason) and control the legal costs.

None of these options is available once the property has been repossessed.

In the case of the Ls, by allowing what they believed to be ‘the inevitable’ and letting Kensington take their home, they unwittingly lost around £20,000 – a sum of money which could have paid for them to rent locally for a number of years as well as be debt free.