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On behalf of Govan Law Centre's community management committee I would like to express our thanks for the opportunity to talk to Members of Parliament about Mohammad Sarwar's Prevention of Homelessness Bill.

The Bill as Mohammad Sarwar and Mike Dailly have already observed has been informed by the experience of my constituents as the local Labour Party councillor for Govan and from the experience of the many families across Glasgow who have faced, and continue to face, mortgage repossession and homelessness.

While in England and Wales it has been possible to resist mortgage repossession proceedings since 1970, in Scotland we have only been able to do so within the last three years.

Yet even within that short space of time we have come to realise that there are a number of systemic and legal problems which can lead to mortgage repossession.   In Glasgow, Govan Law Centre has tried to tackle these problems from a practical viewpoint.

For example, we very quickly realised that about half of the owner-occupiers who presented at Govan Law Centre in Glasgow were not eligible for civil legal aid or advice and assistance from the Scottish Legal Aid Board.  Many people facing homelessness are in low or modestly paid employment - as such they cannot qualify for free legal aid, nor can they afford to pay for a private firm of solicitors - because of their high level of debts.   It would be unfortunate indeed if families lost their home solely through want of access to advice and representation in the courts.

Govan Law Centre has attempted to address this problem by working in partnership with Glasgow City Council to develop a City-wide 'Mortgage Rescue Unit' which would provide free legal help and representation.   Our council is in the process of looking at the best way to take this idea forward.

However, we sincerely believe that in many cases families are facing homelessness due to factors outwith their control - my colleagues have already highlighted these issues - but they are worth repeating because of their role in leading to people being unable to reasonably repay their debts:

• Excessive legal charges of up to £2,000 per case;

• Excessive administrative charges and fees - which can make-up 1/3rd of 'mortgage arrears';

• Excessive interest rates - especially where people have 'consolidation loans'; and

• The fact that many people become unemployed through no fault of their own and then need to wait 9 months before the state will provide any help with housing costs.

I can also speak from personal experience on this issue. Many years ago during a period of unemployment I fell into arrears with my mortgage. When I contacted the Building Society concerned to advise them of my difficulties they responded to my plea for help, by slapping an administration charge onto my account.

They explained an arrears administration charge is levied on accounts where arrears amount to two monthly payments or more. The charge is debited to the account for each month that such arrears exist. I suddenly found that I was another £250 in debt which was more than a monthly payment due. This was followed by another letter which said,

"As you are aware, the Society found it necessary to appoint solicitors/agents to act in possession proceedings in respect of your mortgage account.  The solicitors/agents concerned have now submitted an account for £579.98 in respect of their costs. Under the terms of the Mortgage Deed, this sum has been debited to your mortgage debt." 

You will appreciate that very quickly these charges can outstrip the amount of the debt and make it almost impossible for the home-owner to overturn their difficulties. In my case I was lucky, found a new job and managed in a short time to pay off the arrears and thus lift the threat of homelessness, sadly too many ordinary men and woman  are not so lucky.

It is not unreasonable for the financial sector to make a good profit - but what we are saying is that a balance has to be struck and at present the odds are stacked too far in the favour of the banks and building societies.   

The financial sector has a social responsibility to its clients and society generally.  At present when someone is in arrears of their mortgage the financial sector adds excessive charging and fees to that person's account.   It is a win win situation for the banks and their lawyers; and a lose lose situation for the family - who can sometimes end up homeless and if their house is sold at auction - still owning their lender money!   Excessive legal fees and charges can be the straw that breaks the camel's back.  

Govan Law Centre believes that when owner occupiers' homes are repossessed it is more often than not the State and society which has to pay for the consequences - whether in terms of the cost of social work support, homelessness accommodation or the payment of full housing benefit.   That is not good public policy.  

Of course people need to take financial responsibility - but from a public policy perspective it is always more cost effective to prevent homelessness where that is reasonably possible.   Mohammad Sarwar's Bill would do that - and ultimately save the State hundreds of millions of pounds over the years to come; it would also contribute to the Government's overarching aim of eradicating homelessness within the UK.  

I hope Honourable Members can support my colleague's Bill - as I have no doubt that the problems of mortgage repossession in Govan and Glasgow are the same in all corners of the United Kingdom.

/ENDS