Customer complains of "horrible" SRB experience

08/06/2009

A customer whose finances have suffered due to a sale and rent back (SRB) scheme has spoken out.

Jean Turner said that the firm which bought her home after she fell behind on her mortgage payments gave her severe problems and even led her to make a court appearance, the Observer reports.

SRB works by a customer selling their property at a reduced price, in exchange for the right to carry on living in their home as a rental tenant.

However, consumer groups have criticised providers of these services for buying the property at too low a price - and sometimes for evicting renters mere months after the deal is complete.

Concerns over the sector led the Financial Services Authority to take over SRB regulation last week, in order to put in place a stronger framework of rules for providers.

Norwich resident Jean, 53, told the newspaper that she originally sold her home after falling behind on her mortgage by £1,500.

She then found out that the SRB provider had sold the property on to another owner behind her back - and she had to go to court when they started struggling with their own mortgage payments.

Jean, who now lives in a council house, said: "It's about time someone did something about these schemes. I wouldn't want anyone to go through what I have over the past few years.

"It was a horrible experience."

Commenting on the FSA's move, EuroDebt director Kevin Still said: "SRB can provide a financial lifeline for many homeowners threatened with re-possession. For clients in this position it can be a far better solution than losing the family home.

"It is not uncommon for EuroDebt to act upon a client's unsecured debts through a Debt Management Plan whilst the property is sold and a cheaper rental scheme put in place to allow a reasonable offer to be made to the client's creditors. This process can be protracted, so clients welcome the relief they get from a co-ordinated approach to dealing with both their priority and non-priority creditors."

Tags; Housing Debt and Bills, Young Family Finances, Retirement Money Problems,

Regional Debt Advice; Debt Advice Norwich,

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