Mortgage lenders have to help before they hinder, Brown says

Prime minister Gordon Brown yesterday claimed that repossession must only be a last resort for lenders.

Mortgage lenders will now be expected to show that they have consulted with borrowers and tried to agree on suitable alternatives to repossession if homeowners fall behind on the repayments.

According to new protocols, if a case reaches court the lender will have to recount the exact measures that they undertook to adhere to the new code of practice.

Housing minister Margaret Beckett said: "We must ensure that every avenue has been explored before lenders seek to repossess homes."

These new measures will go some way to "protect the most vulnerable households" during the current economic turmoil, she said.

The government is also proposing that companies that operate sale and lease back schemes - which can target vulnerable owners - should be brought under FSA regulation.