Bank denies 'aggressive approach'

The nationalised lender was more than twice as likely to repossess homes as other lenders, according to BBC research.

Campaigners said the Rock's eagerness to repay taxpayers' money meant it was treating its struggling customers harshly, and called on the government to stop newly nationalised banks repossessing homes unless it was absolutely necessary.

The number of houses in Northern Rock's possession jumped 491 to 4,201 in the three months to September 30. Most of the repossessions were for properties secured with a "Together" mortgage, which allowed buyers to borrow up to 125% of the property's value.

The bank's chairman, Ron Sandler, said: "I refute any suggestion that our position has been anything other than commercial and consistent with the way this bank has operated in the past. I would deny strenuously that we have been overly aggressive (in terms of repossessions)."

A spokesman for the bank said that Together mortgages accounted for 30% of Northern Rock's mortgage book, but 50% of arrears and three-quarters of repossessions.

In August, Northern Rock said it was increasing its debt management staff from 185 to 500 to cope with growing numbers of mortgage defaulters and those having difficulties meeting payments and remortgaging.

Chris Tapp, director of the charity Credit Action, said the bank's "irresponsible" lending policies in the past explained why it had more borrowers who were likely to default, but did not excuse the "aggressive" approach it was taking with them.

"As soon as people fall behind, they have moved to start repossession proceedings," he said. "We are not talking about people who are trying to avoid paying, but people who are struggling in the short term.

"There was a case a couple of days ago where because it was the end of the summer holidays, a family had to buy a load of new school clothes, and as a result fell behind with their payments. Northern Rock went straight to begin repossession proceedings."