Mortgage rescue scheme 'helps just two homes'

03/06/2009

The government's flagship plan to help people struggling with their mortgage debt has helped just two households so far, it has been shown.

New official figures show that the plan - which was intended to help 6,000 households - has suffered a slow start since its launch in January 2009.

The report also showed that around 4,200 people had approached the Mortgage Rescue Scheme for assistance so far, as the effects of the recession hit home across the country.

This includes over 1,000 homeowners making applications over the past month - of which just half were found to be eligible for the assistance.

At the moment, just 376 applications are being processed.

The Scheme offers successful applicants direct action in reducing their mortgage payments through renegotiating and restructuring loans.

EuroDebt director Kevin Still commented: "Unfortunately these figures aren't a reflection of the severity of the problem with many homeowners in serious difficulty meeting both mortgage payments and other priority expenditure. With house prices still falling in April, property disposal is generally only a last resort if there is equity left in the property."

He added: "Direct action with the support of professional debt advisors remains the most effective approach to avoiding re-possession through renegotiation and restructuring of payment plans and the secured loan or mortgage. Dealing with any unsecured creditors that may be compounding the problem is also critical to this process."

Tags; Housing Debt and Bills, Young Family Finances,

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