New scheme for homeowners
21 April 2009
Homeowner Mortgage Support (HMS), which helps homeowners to stay in their homes through financial difficulty, has been launched. Shelter has greeted the scheme as a significant step forward.
HMS will enable eligible borrowers who suffer a temporary loss of income to cut their mortgage interest payments for up to two years, helping them get back on track with their finances.
HMS does not provide consumers with a payment holiday. The mortgage interest payments that have been deferred will eventually have to be paid back.
Before they join the scheme, borrowers will have to receive independent money advice to ensure they make the right decisions for their circumstances.
From 21 April, major high street lenders covering more than 80 per cent of the mortgage market will offer their customers HMS. A number of other banks, building societies and specialist lenders have also confirmed that they will offer their customers HMS as soon as possible.
Lenders offering HMS will have the security of a UK government guarantee if the borrower defaults.
At the same time, four other high street lenders have confirmed today they will offer comparable arrangements to HMS to their customers, while opting not to take up the UK government guarantee.
Graeme Brown, director of Shelter Scotland said:
'With half a million households expected to be more than three months in arrears this year, the launch of the HMS scheme is a significant step forward because it genuinely has the potential to help tens of thousands of struggling homeowners.
'The fact that most lenders have now committed themselves to improving the protection offered to homeowners in trouble is great news. However, the lenders who have decided to operate their own schemes urgently need to make the details explicit. With thousands of worried homeowners coming to Shelter for advice we need to provide the most up-to-date and accurate information to help them keep a roof over their head.
'The only way to prevent 75,000 repossessions across the UK this year is if all lenders are prepared to offer this kind of protection to struggling homeowners. We are calling on the remaining 20 per cent of lenders still yet to sign up to the scheme to do so immediately or announce the details of their own equivalent scheme.'
Anyone in Scotland struggling with their mortgage payments should contact their lender now to discuss their options. Find out more about the Homeowner Mortgage Support scheme here or by calling Shelter Scotland's helpline on 0808 880 4444.