The Government says its £200 million mortgage rescue scheme should help up to 6,000 vulnerable families avoid repossession.
Local authorities will have a major role in this scheme assessing applications and eligible home owners will be offered one of three options:
Shared ownership: a registered social landlord (RSL) buys a share (enabling the purchaser to pay off some of their mortgage) and coverts the property to shared ownership by issuing a shared ownership lease.
Shared equity: a RSL provides an equity loan enabling the householder’s mortgage payments to be reduced.
Chris Cummings, director general of the Association of Mortgage Intermediaries, described the mortgage rescue scheme as: “One of the most sweeping reforms put forward by the Government to deal with those borrowers who fall into arrears. With £200m pledged by Government for vulnerable families, under a three point plan, the shake-up of existing arrangement should not be under-estimated.
“We look forward to working with government to deliver the shared ownership, shared equity and sale and rent back aspects of the proposals - and will be keen to ensure that these schemes work in co-operation with the market. We would particularly like to see the sale and rent back schemes under statutory regulation given the current status of that market.”
Barry Naisbitt, chief economist at Abbey, commented: "The rescue scheme is clearly beneficial for those that qualify. It is in everyone's interest that people stay in their homes and lenders already have measures in place to ensure that everything can be done to help people who are struggling with mortgage payments. A challenge for the authorities will be to decide who is eligible to receive their help and who is not.”
Michael Coogan, director general of the Council of Mortgage Lenders, added that lenders see repossession as a last resort: "CML members have committed to a range of measures designed to ensure that borrowers who may find themselves in difficulty have good access to advice services that can help them, as well as to alert them in good time to changes in their payments to allow them time to budget or to contact their lender to discuss alternative payment options if necessary.”
Date: 2nd, September, 2008
ADVICE TO READERS
While this website is checked for accuracy, we are not liable for any incorrect information included. We recommend that you make enquiries based on your own circumstances and, if necessary, take professional advice before entering into transactions.
Enter your postcode here to find out how much your property is worth, based on Land Registry data.
RSS Feed
Delicious
Digg
reddit
Facebook
StumbleUpon