A £200 million mortgage rescue scheme to help vulnerable families at risk of repossession to stay in their homes was being rolled out across England.
The scheme is targeted at the most vulnerable households, being those on incomes of less than £60,000 a year who would be entitled to be re-housed under homelessness legislation. These would be people who are elderly, disabled or those with children.
Households will be able to apply to their local authority for two options to help them remain in their homes, depending on their circumstances.
They will either be able to sell a share of their home to a housing association, enabling their monthly mortgage payments to be significantly reduced, or they can sell the entire home to a housing association and remain in the property as tenants paying a subsidised rent.
The scheme, which is expected to help up to 6,000 households avoid repossession over the next two years, was being expanded to all local authority areas in England, following its early introduction by 80 councils in December.
Other recent measures to support households at risk of repossession include:
Changes to Income Support for Mortgage Interest (ISMI) which came into effect on January 5th.
ISMI is a benefit which provides financial support to help homeowners pay the interest on their mortgages if they lose their jobs. It is now available to homeowners who have an outstanding mortgage of less than £200 000.
People can now get this benefit 13 weeks after they lose their jobs.
The Homeowner Mortgage Support Scheme.
This will be for people who are having trouble making payments because of a sudden loss of income, but who aren't eligible for ISMI or for mortgage rescue. They must have an outstanding mortgage of less than £400 000 and savings of less than £16 000.
They will be able to defer part of the payment which will be added on to the end of the term, guaranteed by the government and lender.
The Government has been working on the details of the scheme with lenders and has also tabled an amendment to the Banking Bill to enable the implementation of the scheme.
The Mortgage Pre-Action Protocol.
This is a legal agreement to ensure that lenders will only use repossession as a last resort. They will look at all the other alternatives with the borrower, like reducing monthly payments.
Households wishing to apply for mortgage rescue should contact their local authority or seek advice from a local Citizens Advice Bureau.
