Hi Lucy,(posted 8600 days ago)I'm sorry that no-one has answered your question before now but this site has been swamped with questions regarding repossession after the recent high profile media publicity that has highlighted negligents actions by lenders such as lthe HALIFAX and ABBEY NATIONAL.
Anyway I've been there, got the tee shirt etc., I know this situation. You would be advised not to interfere with this process and let the the DSS handle the question of the "Interest Only" payments. The DSS payment will probably NOT cover the full interest due. The lender will be quite "happy" to receive these DSS payments even though it does not meet the full amount of interest. This will mean that the arrears will grow. They will certainly not try to evict you whilst the DSS are paying. The problem comes when your dependants (Children, I assume they exist otherwise the whole situation changes) come of age. It is likely that when child support stops, so will the interest payments. The lender will probably then ask for all the arrears to be paid (As in my case). If repossession ensues then you will probably find you may have moved dramatically up the council housing list.
I feel sorry that you have been put in this position,
Regards,