The Scottish Government

2003

CONTENTS

ACKNOWLEDGEMENTS
LIST OF ACRONYMS
EXECUTIVE SUMMARY
CHAPTER ONE: INTRODUCTION
RESEARCH OBJECTIVES
METHODS
STRUCTURE AND CONTENT OF THE REPORT
CHAPTER TWO: BACKGROUND
PRINCIPAL FINDINGS
OBJECTIVES
LITERATURE REVIEW
THE MORTGAGE CODE
LEGAL BACKGROUND
IMPLICATIONS
CHAPTER THREE: SOURCES OF REPOSSESSION INFORMATION
PRINCIPAL FINDINGS
OBJECTIVES
SOURCES OF REPOSSESSION DATA
CML DATA
CIVIL JUSTICE STATISTICS (CJS)
HOMELESSNESS APPLICATIONS TO LOCAL AUTHORITIES AND HOUSING APPLICATIONS TO HOUSING ASSOCIATIONS
TRENDS IN CML AND CJS FIGURES
IMPLICATIONS
CHAPTER FOUR: COURT DATA INVESTIGATION
PRINCIPAL FINDINGS
OBJECTIVES
CHOICE OF COURTS
INFORMATION IN COURT RECORDS
DATA COLLECTION
COLLATED RESULTS
DISCREPANCIES BETWEEN FIGURES
SAMPLING OF PROCESSES
ANALYSIS OF THE COURT DATA
IMPLICATIONS
CHAPTER FIVE: QUESTIONNAIRE SURVEY OF LENDERS
PRINCIPAL FINDINGS
OBJECTIVES
METHODOLOGY
ESTABLISHING A COMPREHENSIVE LIST OF LENDERS IN SCOTLAND
QUESTIONNAIRE DESIGN
RESPONSE RATE
RESULTS
IMPLICATIONS
CHAPTER SIX: FOLLOW-UP INTERVIEWS
PRINCIPAL FINDINGS
OBJECTIVES
LENDERS' POLICIES
METHODOLOGY
PRE HOUSE PURCHASE: ADVICE AND AFFORDABILITY CHECKS
HOUSEHOLDS IN ARREARS/REPOSSESSED
IMPLICATIONS
CHAPTER SEVEN: BORROWERS SURVEY
PRINCIPAL FINDINGS
OBJECTIVES
METHOD
SURVEY SPECIFICATION AND RESPONDENT RECRUITMENT
IDENTIFICATION OF INTERVIEWEES
METHODS OF RECRUITMENT
RESPONDENT CHARACTERISTICS
PRE-HOUSE PURCHASE
PRE-HOUSE PURCHASE ADVICE
POST-PURCHASE CHANGES
ARREARS
COPING STRATEGIES/EFFECTS ON HOUSEHOLDS
REPOSSESSION
WHAT BECAME OF PEOPLE THAT WERE REPOSSESSED?
COMPARISON BETWEEN THOSE RECOVERING FROM ARREARS AND THOSE EXPERIENCING REPOSSESSION
VIEWS ON LEGISLATION
IMPLICATIONS
CHAPTER EIGHT: CONCLUSIONS
OBJECTIVES
ESTIMATE OF REPOSSESSIONS IN SCOTLAND
FUTURE INDICATORS
ACTIONS THAT MIGHT REDUCE ARREARS AND REPOSSESSION
OTHER RECOMMENDATIONS
ANNEX ONE: GLOSSARY
ANNEX TWO: INFORMATION CONTAINED IN COURT REGISTERS
ANNEX THREE: COURT RESEARCH: DETAILED FINDINGS
ANNEX FOUR: COMPILING THE LIST OF LENDERS
ANNEX FIVE: CML STATEMENT ON DEBT FOLLOWING MORTGAGE POSSESSION
ANNEX SIX: OUTCOME OF PILOTING METHODS OF CONTACT FORBORROWERS
ANNEX SEVEN: BORROWERS CASE STUDIES

LIST OF TABLES/FIGURES
TABLE 3.1: CJS AND CML FIGURES FOR SCOTLAND 1993 - 2000
TABLE 3.2: CML FIGURES ON LEVELS OF REPOSSESSIONS IN SCOTLAND AND UK
TABLE 3.3: JS FIGURES FOR MORTGAGE REPOSSESSION DECREES FROM 1994 TO 2000
TABLE 3.4: APPLICATIONS FOR LOCAL AUTHORITY HOUSING AS LOSS/THREATENED LOSS OF ACCOMMODATION DUE TO A COURT DECREE ON MORTGAGE DEFAULT IN SCOTLAND
TABLE 3.5: MORTGAGE ARREARS/REPOSSESSION AS THE REASON FOR REQUIRING HOUSING IN HOUSING ASSOCIATION APPLICATIONS
FIGURE 3.1: TRENDS IN CML, CJS AND LA HOUSING APPLICATIONS
TABLE 4.1: REPOSSESSION DECREES GRANTED IN EACH COURT DISTRICT 1994 AND 2000
TABLE 4.2: THE NUMBER OF ORDINARY CAUSES INITIATED AND DISPOSED OF BY NATURE OF ACTION, AND WHETHER THE ACTION WAS DEFENDED, DURING 1999
TABLE 4.3: ALL RESIDENTIAL REPOSSESSION COURT CASES INITIATED (RESEARCH FIGURES)
TABLE 4.4: CJS AND RESEARCH FIGURES FOR REPOSSESSION DECREES INITIATED
TABLE 4.5: CJS AND RESEARCH FIGURES FOR REPOSSESSION DECREES GRANTED
TABLE 4.6: NUMBERS OF PROCESSES SAMPLED
TABLE 4.7: REPOSSESSION CASE OUTCOMES (1994 AND 2000)
TABLE 4.8: OUTCOMES OF CASES (1994 AND 2000)
TABLE 4.9: START YEAR BY OUTCOME OF REPOSSESSION COURT CASE
TABLE 4.10: LOCATION OF CASES (1994 AND 2000) BY OUTCOME
TABLE 4.11: PURSUERS OF REPOSSESSION CASES (1994 AND 2000)
TABLE 4.12: PERCENTAGE OF DEFENDED CASES BY LOCATION OF THE COURT
TABLE 4.13: OUTCOME OF CASES BY WHETHER DEFENDED OR NOT DEFENDED
TABLE 4.14: LEGAL AID APPLICATIONS FOR REPOSSESSION COURT CASES
TABLE 4.15: LENGTH OF MORTGAGE (BEFORE COURT ACTION BEGAN)
TABLE 4.16: DIFFERENCE BETWEEN 1994 AND 2000 FIGURES BY COURT
TABLE 4.17: DIFFERENCE BETWEEN 1994 AND 2000 FIGURES BY COURT (CJS FIGURES)
TABLE 5.1: MAIN LENDERS IDENTIFIED FROM REGISTER OF SASINES
TABLE 5.2: ESTIMATED SCOTTISH MARKET SHARE OF LENDERS RESPONDING TO QUESTIONNAIRE
TABLE 5.3: VALUE OF OUTSTANDING BALANCES 1999 AND 2000
TABLE 5.4: NUMBER OF LOANS IN SCOTLAND
TABLE 5.5: LENDERS WITH MORTGAGES OVER THREE MONTHS IN ARREARS
TABLE 5.6: LOAN TO VALUE AT THE TIME THE MORTGAGE LOAN WAS ARRANGED OFREPOSSESSED PROPERTIES
TABLE 5.7: ORIGINAL VALUATIONS OF PROPERTIES REPOSSESSED IN 1999
TABLE 5.8: PERCENTAGE OF REPOSSESSIONS BOUGHT UNDER RTB
TABLE 5.9: LOSSES ON REPOSSESSED PROPERTIES
TABLE 5.10: MONETARY VALUES OF THE LOSSES
TABLE 5.11: PRINCIPAL REASONS OF THE PROPERTIES TAKEN INTO POSSESSION IN 1999
TABLE 5.12: SINGLE MULTIPLIERS
TABLE 5.13: JOINT MULTIPLIERS
TABLE 6.1: SOURCE OF NEW BUSINESS
TABLE 6.2: LEVELS OF COMMISSION
TABLE 6.3: EXAMPLES OF BORROWER CHARGES
TABLE 6.4: TYPICAL COSTS DURING THE REPOSSESSION PROCESS
TABLE 6.5: VARYING LEGAL ROUTES TAKEN BY LENDERS
TABLE 7.1: METHODS OF CONTACTING BORROWERS
TABLE 7.2: LOCATION OF INTERVIEWEES
TABLE 7.3: EMPLOYMENT STATUS OF INTERVIEWEE BY PARTNER'S EMPLOYMENTSTATUS
TABLE 7.4: TOTAL AMOUNT OF OUTSTANDING DEBT AT TIME OF PURCHASE
TABLE 7.5: DEBT TO INCOME RATIO
TABLE 7.6: SOURCE OF FORMAL ADVICE
TABLE 7.7: REASONS GIVEN FOR NOT TAKING OUT MPPI
TABLE 7.8: LIST OF RE-MORTGAGE LENDERS
TABLE 8.1: ESTIMATES OF REPOSSESSION IN SCOTLAND 1999 AND 2000
TABLE A3.1: OUTCOMES AND LOCATIONS OF DEFENDED CASES
TABLE A3.2: LENGTH OF REPOSSESSION COURT CASES
TABLE A3.3: CASE OUTCOME BY LENGTH OF COURT CASE
TABLE A3.4: VARIATION IN CASE DURATION BETWEEN COURTS
TABLE A3.5: OUTCOME BY COURT
TABLE A4.1: LENDERS IDENTIFIED FROM COURT RECORDS
TABLE A4.2: LENDERS IDENTIFIED FROM REGISTER OF SASINES
TABLE A6.1: SCORE LOGS GIVING MORTGAGE ARREARS/REPOSSESSION AS THE REASONFOR REQUIRING HOUSING.
TABLE A6.2: HOUSING APPLICATION FOR MORTGAGE DEFAULT
TABLE A6.3: HOMELESS APPLICATIONS WHERE REASON GIVEN WAS MORTGAGE DEFAULT, BY LOCAL AUTHORITY ASSESSMENT: 1998-99
TABLE A6.4: LOCATION OF ADDRESSES IN THE YEAR 2000 COURT RECORDS
TABLE A6.5: NEWSPAPER ADVERT

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