Government to Guarantee Mortgage Payments
04/12/2008
Prime Minister Gordon Brown has announced a new Homeowner Mortgage Support Scheme which will guarantee interest payments if homeowners lose their jobs or suffer a pay-cut.
In a statement, the Treasury announced: "The new Homeowner Mortgage Support Scheme will enable households that experience a significant and temporary loss of income as a result of the economic downturn to defer a proportion of the interest payments on their mortgage for up to two years. The Government will guarantee the deferred interest payments in return for banks’ pariticipation in the scheme.
"The Government will work with lenders over the coming days to develop the scheme in detail, with a view to it being available to customers early in the New Year. The country's eight largest banks have already pledged that they will work with the Government to implement the scheme."
A spokesperson added that HBOS, Nationwide, Abbey, Lloyds TSB, Northern Rock, Barclays, Royal Bank of Scotland and HSBC have all agreed to participate.
Insisting that the scheme did not represent a get-out clause for "won’t pay" borrowers, the Council of Mortgage Lenders endorsed the new scheme, saying it would "provide welcome reassurance to the vast majority of borrowers that the Government and lenders are doing all they can, in partnership, to help those customers who 'can't pay' due to a change in circumstances as we enter a recession."
In a statement, the Treasury announced: "The new Homeowner Mortgage Support Scheme will enable households that experience a significant and temporary loss of income as a result of the economic downturn to defer a proportion of the interest payments on their mortgage for up to two years. The Government will guarantee the deferred interest payments in return for banks’ pariticipation in the scheme.
"The Government will work with lenders over the coming days to develop the scheme in detail, with a view to it being available to customers early in the New Year. The country's eight largest banks have already pledged that they will work with the Government to implement the scheme."
A spokesperson added that HBOS, Nationwide, Abbey, Lloyds TSB, Northern Rock, Barclays, Royal Bank of Scotland and HSBC have all agreed to participate.
Insisting that the scheme did not represent a get-out clause for "won’t pay" borrowers, the Council of Mortgage Lenders endorsed the new scheme, saying it would "provide welcome reassurance to the vast majority of borrowers that the Government and lenders are doing all they can, in partnership, to help those customers who 'can't pay' due to a change in circumstances as we enter a recession."
