Mortgage support scheme starts through Lloyds, RBS and Northern Rock
21 April 2009 / by Rebecca Sargent
A Government initiative aimed at reducing the number of home repossessions during the recession has begun.
The Homeowners Mortgage Support Scheme (HMSS) was announced in December but will be available to struggling homeowners with mortgages through Lloyds Banking Group, RBS, Northern Rock and other leading high street lenders from today.
The support is available to homeowners who, amongst other things, bought their home before December 1 2008, have an outstanding mortgage of less than £400,000, and have savings of less than £16,000.
Speaking at the scheme’s announcement, Housing Minister Margaret Becket said: “We know that many families are worried about how to pay the mortgage right now, and we’re determined to ensure there is real help available to them.
“Today’s news is a result of excellent co-operation between Government, lenders, and money advice services.
“The clear message to borrowers is to contact your lender straight away if you’re concerned about how to pay the mortgage as a solution can often be found,” she added.
Other mortgage lenders, including Barclays, Santander, HSBC and Nationwide, are not offering the HMSS, but have vowed to offer comparable arrangements.
Commenting on the scheme, director of external affairs at the Royal Institution of Chartered Surveyors, Gillian Charlesworth said: “Steps to help families stay in their homes and avoid the trauma of repossession are essential given the current state of the housing market and the prospect of a further sharp rise in the level of unemployment.
“If these schemes are effective then there is a good chance that repossession levels will be lower than those predicted by many in the industry.”
Director general of the Council of Mortgage Lenders, Michael Coogan, added: “Lenders are working strenuously to keep borrowers in their homes where they have a good prospect of being able to get back on track and sustain their home-ownership in the long term.
“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,” he added.
© Fair Investment Company Ltd