UK consumers should take note of this – Homes are now being repossessed even for a measly £600 debt. Unbelievable but true. The Office of Fair Trading has recently initiated an investigation on the cases of alleged home repossessions involving non-mortgage debts. Well, this is could be another reason for consumers other credit options such as payday loans or cash advance loans.
As of now, there are 4 unnamed loan providers that have been ordered by the OFT to take necessary actions to rectify lapses in the way that non-mortgage debts are being handled. Consumer groups are calling for definitive move from concerned entities and clamp down on companies that require consumers to attach their homes as security for non-mortgage loans. Another cause of concern for UK consumers is the reported cases of lenders that adopt misleading and sometimes oppressive documentary requirements in their loan offers.
This form of loan transaction is referred to by financial experts as charging order. A special provision in the loan agreement gives the loan provider with the option to apply for a charging order with the courts in the event that a borrower fails to comply with the terms of the loan agreement. Generally, financial companies will initiate such action in cases of default in the repayment of loans. This court action effectively converts these erstwhile unsecured loans into loans that are secured by a property of value. In the last 5 years, the number of charging orders has increased by 264%, topping the 160,000 mark. 
However, it is important for us to understand that only a small number of these cases actually went the distance where borrowers are forced to dispose of their homes. Still, this prevailing condition is a serious concern for consumers who might unwittingly find themselves in situations where they are actually left with no other option but to sell.
