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A remarkable ombudsman victory for a householder who had his home repossessed after being  mis-sold a hefty mortgage could set a precedent, preventing others from losing their properties as the recession bites, lawyers say.

This year an estimated 75,000 families - against 40,000 last year - will lose their homes, according to the Council of Mortgage Lenders (CML).

But many who face handing back the keys could be helped by rules covering "suitable advice"  for borrowers, buried in the handbook of the Financial Services Authority (FSA), the City  regulator.

Andrew Brown (not his real name) struggled to repay his mortgage but subsequently took his  mis-selling case to the Financial Ombudsman Service, and has now won. Despite turning to  the FOS late on and being repossessed, he will receive compensation - while other borrowers  who begin cases at an earlier stage than he did might well be able to save their homes too.

A housing association tenant, Brown had the valuable promise of a rent fixed for life.  However, a mortgage adviser persuaded him to buy the property and failed to consider "what  would happen when the attractive discounted rate [set up on that mortgage] ended",  according to an FOS spokeswoman.

Brown was repossessed and had to move; he then lodged a complaint with his mortgage adviser  and ultimately brought the case to the FOS.

 

Shelter, the housing charity, said that the number of repossessions could be a fifth higher  than current figures suggest because of actions taken by “second charge” lenders.

Tens of thousands of people have taken out a “second charge” home loan on their property  and are liable to repossession if they fall behind on payments. The second charge market is  worth more than £11 billion. Council of Mortgage Lenders (CML) repossession data do not  include any actions taken by second charge lenders.

 

Housing charity Shelter said this figure represented 6% of UK homes.

Shelter said people in lower social groups had been most likely to need to use their credit  cards, but that the middle classes had also been affected.

The charity said the figure was a "shocking discovery". Its survey questioned 2,022 people.

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Shelter said it urged people who were struggling to keep up with their housing costs to  urgently seek expert advice.