Mortgage assistance scheme launched

22/04/2009

A government scheme aimed at helping out people who are struggling with meeting their mortgage payments began yesterday.

The plan, announced by prime minister Gordon Brown last year, allows people hit by a sudden change in circumstances, such as job loss, to reduce their payments for a two-year period.

Household budgets have tightened in the economic downturn, with home repossessions rising from 27,000 to 40,000 from 2007 to 2008.

One industry prediction suggested that the number of people losing their homes could increase by a further 40,000 this year.

Participating lenders in the scheme include RBS, HBOS and Lloyds TSB - all part-owned by the government.

However, others including HSBC and Abbey have declined to take part.

The mortgage scheme was welcomed by the Council of Mortgage Lenders yesterday.

Director general Michael Coogan commented: "Lenders fully recognise their responsibility to keep people in their homes where repossession can be avoided.

"The fact that some lenders are utilising the new scheme and others are not indicates simply a difference in their approach to forbearance, not in their commitment to it."

Tags; Housing Debt and Bills, Young Family Finances, Credit Card Lifestyle,

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