RBS extends helping hand to those with mortgage arrears

Posted under General by Michael

The Royal Bank of Scotland (RBS) has offered breathing time of six months for the struggling families who have not been able to make payment of their mortgages.

The bank has assured that it will not repossess the homes of borrowers who fell behind on mortgages for at least the next 6 months. It also ensured that customers can avail of independent advice from legal experts before bank initiates legal action.

The bank’s offer of help has been welcomed by Crisis, which represents the UK homeowners who are unable to pay mortgage arrears. It hoped that more lenders would come forward with such offers of help.

The RBS move came after the purchase of 58% shares of RBS by the Government for £15bn. It is expected that RBS’s announcement will exert pressure on the UK’s largest lender, HBOS, which has also been provided cash by the Government.

RBS, the owner of NatWest, is the fifth biggest lender in Britain with a market share of 7%. Its move was also the result of a warning issued by the Financial Services Authority last week giving a 31 January 2009 deadline for the lenders to prove that customers with mortgage arrears or facing repossessions were treated fairly.

RBS has pledged to freeze overdraft charges for its small and medium sized enterprises for minimum one year commencing from 1st December, 2008.

More