DSS help is no shield against the bailiffs: Lenders are moving to repossess those being assisted with mortgages

A BUILDING society is taking legal action to repossess the home of a single mother, even though the Department of Social Security is paying all but pounds 52 a month of her mortgage repayments.

The action, by the Cheltenham & Gloucester, would appear to be the tip of an iceberg - there is increasing evidence that other lenders are taking similar action. The situation is likely to get worse as the housing market improves, and lenders realise that selling repossessed properties is again viable.

For two years, Jennifer Morgan-Jones and her two children have been living with the worry of losing their home. She has a mortgage of pounds 35,000 and a small further advance secured on her bungalow.

In October 1991, the building society started legal action to repossess the property because of arrears of pounds 1,276. Mrs Morgan-Jones defended the action with legal aid. In October 1992, the C&G agreed to adjourn the proceedings before the matter got to court.

Mrs Morgan-Jones's current monthly repayments are pounds 275.13, of which pounds 32.85 is the insurance premium for her buildings insurance. Mrs Morgan-Jones does not work. The DSS has been contributing to her mortgage repayments since May 1988, and payments have been made direct to the C&G since July 1992.

The DSS pays pounds 190.20, leaving a mortgage repayment shortfall of pounds 52.08. The DSS does not pay more because it will not usually reimburse repayments on a further advance. With the DSS paying the lion's share of her mortgage and the court proceedings adjourned, Mrs Morgan-Jones thought she could rest easy.

But on 2 August, she got a letter from the C&G informing her that it had requested another court hearing 'to obtain a possession order for the property'.

Mrs Morgan-Jones was devastated: 'I have been fighting so hard to keep a home for myself and the children. It just does not seem fair.'

Paul Hicks, a solicitior with the Ross-on-Wye firm David Barry who acts for Mrs Morgan-Jones, described the C&G's action to resurrect the possession proceedings as 'somewhat unfriendly'. 'The C&G has recently added more than pounds 650 to Mrs Morgan- Jones's mortgage debt for legal costs, which has not helped. I am aware that there are mortgage arrears in this case, but they are not growing at an enormous rate and there is apparently plenty of equity in the property.'

A spokesman for the society said it was applying for a court order to protect its security. 'This account has cost the society a great deal, because it has been in arrears for three years and in solicitor's hands for two years,' he added.

'The society has spent a great deal of time and effort in trying to help her through a difficult personal time. But it has gone on and on, and we are not sure there is any light at the end of the tunnel.'

The C&G confirmed that the DSS is, and has been, contributing to the mortgage payments for over a year, and added: 'We are not saying that we will go right through to repossession.'

In late 1991, the Council of Mortgage Lenders agreed with the Government that repossession action would not be taken against borrowers whose mortgages the DSS was paying in full. However, the same does not apply, if the DSS pays only a part of the mortgage, even if it is a substantial proportion.

Katrina Dunbar, a worker at Shelter, the housing charity, says it is finding an increasing number of lenders trying to repossess in such cases.

(Photograph omitted)