Unjust and unwise fees add to problems

Commenting on the CML's expectation that the number of households more than three months behind with their repayments will reach 500,000 next year, Louise Cuming, head of mortgages at price comparison site moneysupermarket.com, said: "Homeowners have every right to be nervous as the prospect of losing their homes becomes a reality for so many people next year.

"A sad part of this is that lenders are still taking the opportunity to levy hefty charges when borrowers go into arrears. Given the dire state of the economy and the fact many more people are under financial pressure, providers should cut arrears fees if they want to prove a real commitment to supporting struggling customers.

"Of all the charges, the extra fee - sometimes up to £100 - for debt counselling seems most unfair. For lenders to take advantage of their most vulnerable customers who have approached them for help to get a grip on their finances is unacceptable.

"Lenders aren't charities, but no one wins if they automatically burden customers with more fees and debt. I'm sure some customers in arrears are unaware that some lenders charge for every call they make and letter they send. Anyone who finds themselves in difficulty should explore all their options, including contacting free debt advice organisations such as the Citizens Advice Bureau."