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A Benefits and Work member has been threatened with having his house repossessed and had his credit score destroyed because the DWP failed to arrange his mortgage interest payments. A DWP staff member claimed they are suffering from a huge backlog of work due to understaffing.

Trevor (not his real name), developed a devastating, life-threatening, condition that led to him being unable to work and his partner giving up work to provide full time care.

Their mortgage interest payment was covered by the DWP’s support for mortgage interest (SMI) scheme.

In April 2018, SMI ceased to be a benefit and became a repayable loan administered on behalf of the DWP by SERCO. Our member signed up for the loan scheme, under which the maximum amount that can be covered is £200,000.

Trevor told us:

“Our mortgage is for slightly more that the £200,000 so we have to make some payments ourselves which we do religiously. Despite this, we were receiving letters from our mortgage lender advising us that we were in arrears and threatening us with repossession.”

After repeated attempts, Trevor got through to someone at the DWP.

However, he was not allowed to talk to staff administering the scheme directly and the DWP staff member he spoke to could not get through to them because their phone was permanently engaged. The DWP agreed to call Trevor back when they knew what was happening,

“They didn’t ring and in the meantime we received a letter from our lender commencing repossession proceedings.”

Further calls and emails to his lender revealed that the DWP had not paid Trevor’s mortgage interest for at least four months.

By now Trevor’s partner’s health had also suffered a serious downturn because of the stress of facing eviction.

Trevor managed finally to speak to someone at the DWP who contacted the payments team:

“She advised me that the payments team had a massive backlog due to a shortage of staff but that they had moved our file to the top of the pile.”

“She then explained that the DWP had made an agreement with the mortgage lenders all of whom had agreed not to start any repossession proceedings against those affected by the backlog.”

However, when Trevor contacted his lender again to point this out he was given short shrift:

“Our own lender denies there is such an agreement in place and has recorded the arrears on our credit history and refuses to remove it despite the fact that the DWP have now paid our mortgage up to date. I cannot understand why the DWP would lie about having an agreement with the lenders if that wasn’t the case.”

Trevor’s mortgage interest has now been paid and he is fighting to have his credit record amended as the default on payments was nothing to do with him.

At the moment it is not clear whether Trevor’s experience was an isolated one or whether there is a serious problem which may be affecting thousands of people. The claim of a large backlog may be true or may have been a fiction to cover-up an individual error.

But as part of his attempt to restore his credit score, Trevor would like to hear if any other claimants have suffered similar problems with support for mortgage interest.

“I am particularly keen to know if there is an agreement in place between the DWP and the mortgage lenders and if so, are there any lenders who refused to sign up to it and also how many others have suffered similar experiences.”

Please leave a comment below the line or email us with your experience.

Benefits and Work is making a Freedom of Information request in connection with this issue.

Comments  

#4 janet 2019-05-30 18:26
Hi again
If there is an agreement between the DWP and lenders then they shouldn’t have reported a negative status with the credit agencies when they were aware the arrears were due to a backlog?
I also know numerous people who have been offered ‘new deals’ on their mortgage which more or less are exactly the same give or take 50p as the amount the DWP pay for interest... Bo one told me that the 50p difference means I am permanently in arrears and as such it’s reproductive the credit agencies every month ... This destroys my credit score and leaves me at the mercy of my lender as no other bank etc will ever consider me for a mortgage or any other financial services from the date I stop claiming interest support for a further 3 yrs it stays on my files !!!
#3 janet 2019-05-30 18:18
Hi
Exactly the same happened to me.
Exactly the same , which makes me wonder if the similarities are to similar.
I called my mortgage provider as there are arrears in every month and a note saying ‘a third party’ is paying my mortgage.
I’m not in arrears, apart from late DWP payments, I’ve never been in arrears.
Apparently whilst DWP are paying this interest loan (old msi )then they
report monthly to the credit agencies for all the world to see !!!
I’d appreciate if anyone knows how to get the payments made to myself so I may pay my lender directly which will not incur the negative status the DWP report to Equifax Experian etc ?
#2 TTB 2019-02-06 13:37
I find myself in a similar situation where the DWP have not paid the SMI to my mortgage provider since November 2018. I had agreed for the SMI to be changed to a loan and it had been paid as a loan since April 2018. I have had no communicaton to inform me that the payments would not be made and have only found out due to the mortgage company chasing 3 months of arrears.

I am unable to contact the DWP SMI department directly and instead have to wait for them to contact me when it suits them. So I am in arrears with no way of contacting the department who are meant to be paying this in the form of a loan. I have accred interest and a black mark on my credit score through no fault of my own.
#1 Dave h 2019-01-22 11:10
I just had my mortgage statement arrive my SMI hasn't been paid since April 2018 Fortunately we have overpayments which the nationwide have been using to take payments waiting on a call from DWP lucky I looked at statement

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