Mortgage News Mortgage Protection Scheme Has Benefitted Just Two Homeowners 3376

Mortgage Protection Scheme has benefitted just two homeowners

01 June 2009 / by Rachael Stiles
Only two homeowners have participated in the Government’s Mortgage Protection Scheme since it was launched in January in an attempt to limit the number of repossessions.

Initial data for April from Communities and Local Government about the success of the scheme, reveals that 1,084 homeowners approached their local authority with mortgage difficulties in April, 139 of which applied for the Mortgage Protection Scheme.

But, of this number, 10 were offered help through participation in the scheme, and just one mortgage customer accepted.

Commenting on the statistics, Liberal Democrat Shadow Housing Minister, Sarah Teather said: “These figures show that the Government’s housing schemes have been a case of all mouth and no trousers.”

“Tens of thousands of families are facing repossession and homelessness but the tight restrictions on these highly publicised schemes means that many families are simply being left to struggle on alone.”

Ms Teather wants to see ministers reform mortgage law so that repossession is only ever used as a ‘genuine’ last resort. Many mortgage lenders claim that they consider all other possibilities first, but critics are skeptical about their commitment to putting their customers first.

Meanwhile, it has been revealed that Bradford & Bingley, which had its mortgage book nationalised last year, is seeing one in 20 of its mortgage customers defaulting on their mortgages.

More than five per cent of mortgage customers are at least three months in arrears, “and it will continue to deteriorate for the remainder of the year”, Bradford & Bingley’s chairman Richard Pym, told The Times.

B&B; has already borrowed in excess of £20billion from the Government, on which B&B; pays practically no interest, and is expected to ask for more as its own loans become due faster than their mortgages are repaid. It is estimated that £2billion a year will be repaid in mortgages over the next three years, but in the same time, £10billion of its wholesale borrowing will be due.

The Government has pledged to provide the necessary additional funding while the building society winds down its mortgage business. When the Government took control of its mortgage book last year, its branches and savings arms were sold off to Spanish banking giant Santander.

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Written by Editorial Team