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Mortgage support largely welcomed

Mortgage support largely welcomed

Category: Mortgages

Updated: 22/04/2009
First Published: 21/04/2009

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The newly installed Homeowners Mortgage Support Scheme (HMSS) has been largely welcomed by groups across the UK's financial, social and housing spectrums.

Borrowers who find themselves unable to meet their mortgage repayments will now have the option to defer 70 per cent of interest payments for two years.

Homeowners will have to meet a number of requirements, such as having a mortgage worth less than £400,000 and household savings of less than £16,000 to be eligible for support.

The support scheme, which has been rolled out across a number of the country's banking institutions, has been endorsed by The British Banker's Association, whose executive director, Eric Leenders, said the banks have made a number of strong commitments to help their customers in recent months.

"Responsible homeowners should feel confident that every action is being taken to ensure they can remain in their homes while their finances are restored," he added.

Dan Watkins, managing director of mortgages at Lloyds Banking Group, which has signed up to the scheme, echoed such sentiments, saying the HMSS would act as an extension to the assistance already afforded to customers.

The Council of Mortgage Lenders said it welcomed the new measures and that it would provide an additional tool to stave off repossession, which it considered to be a last resort.

The scheme was dubbed "a welcome addition aiming to fill a specific gap in the safety net for homeowners who may not be eligible for other assistance," by Teresa Perchard of Citizens Advice. It also urged lenders that have not yet joined the scheme also to show forbearance and said people should explore many more options before signing up to the HMSS.

Peter Williams, of the Intermediary Mortgages Lenders Associations, said the HMSS represented a further component in the mechanisms in place to help mortgage borrowers but that many would not be eligible, given the complex set of requirements needed to take advantage of support.

Following the Building Societies Association's announcement that its members had signed up to a Customer Commitment which will offer customers similar support to the HMSS, Paul Broadsheet, head of mortgage policy, said: "This further confirms the building society's commitment to borrowers in difficulty."

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