New scheme to help home owners struggling with mortgage debt

The Government has launched a national scheme to help home owners falling into debt with their mortgage payments

By providing good advice and assistance, the scheme aims to help mortgage borrowers stay in their home if they encounter problems paying their mortgage.

It may be sensible to use this timely information in conjunction with other debt management advice services and web sites.

Based around a user friendly web site, the mortgage help scheme offers a step by step guide to how to handle the situation so that struggling borrower can keep his home.

Covering topics such as missed mortgage payments, the threat of repossession and court orders, the web site advises people to face up to their difficulties and contact their mortgage lender as soon as possible.

There are links to local authority resources that may be able to help those close to repossession or a court appearance and detailed information about the processes that may result in the loss of a home.

This information campaign has won the support of the Council for Mortgage lenders. Michael Coogan, the CML’s director general commented

“We welcome this additional initiative by the government to remind borrowers to speak to their lender at the earliest possible opportunity, and preferably as soon as they think they might miss a payment. Avoiding possession is as important to lenders as it is to borrowers, and an early warning will help reduce the risk of this worst-case outcome.

“Most customers who are committed to resolving their problems and working with their lender can successfully manage their way through a period of short-term payment difficulty and avoid possession.”

Mortgage approvals rise again

Figures released by the Bank of England have shown that the number of mortgage applications which were successful in July rose on the previous month's figures.

The Bank saw 50,123 home purchase loans taken out over the 31-day period, higher than the 47,891 in June, marking the sixth consecutive month that mortgage approvals have risen.This was a 53 per cent year-on-year increase and the best lending statistics since April 2008.

However, it was also found that repayments outstripped mortgage lending in the month for the first time since records began, with homeowners dishing out £418 million more than banks lent.

Simon Rubinsohn, chief economist at the Royal Institute of Chartered Surveyors, commented on the finding: " Mortgage repayments increased to their highest level (in July) since March implying that existing funds are being recycled rather than new monies being added to the mortgage market .

"A recent Council of Mortgage Lenders study found that £16 billion worth of mortgages were taken out across the UK in July and while this was an increase on June's figures, overall results were down 36 per cent year-on-year.