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CML Media Note in advance of the Ministry of Justice data on court actions and orders for possession

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Thursday, 14, Aug 2008 12:00

The Ministry of Justice will release data on court actions and orders for possession in the second quarter of 2008 tomorrow. The CML published data on mortgage arrears and possessions in the first half of 2008 last Friday.

While the MoJ figures report the number of cases that went to court and the number of court orders for possession granted, the CML figures relate to actual possessions of properties by first charge lenders in the UK.

Last week’s CML data showed the number of properties taken into possession in the first six months of 2008 was 18,900 (0.16% of all loans). The CML is maintaining its forecast of 45,000 total possessions and 170,000 mortgages in arrears of more than three months by the end of the year. These numbers remain extremely small when seen in the context of the 11.74 million mortgages in the UK.

The MoJ figures are usually significantly higher than the CML figures as there are substantial differences in the sets of data:

- The MoJ figures relate to court activity which may not result in a possession. Possession proceedings can be abandoned right up to the last minute, even after an order has been granted lenders will not enforce it if a satisfactory payment plan can be agreed with the householder. Lenders may use court proceedings to help ensure that households in arrears have a firm commitment to a payment plan designed to get them back on track

- The CML figures relate to first charge lending only, and do not include possessions as a result of court proceedings by other secured lenders (known as second or subsequent charge lending). Occasionally several court proceedings may apply to the same individual, for example where different lenders holding the first charge and a subsequent charge seek an order from a court at the same time.

The MoJ figures relate only to England and Wales whereas the CML figures are for the whole of the UK.

We published a more detailed explanation of the different sets of data and their implications in a recent News & Views article

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