Homeowner mortgage scheme has been launched to prevent repossessions of property. It is aimed at helping homeowners who are forced to evict due to nonpayment of their mortgages.
The scheme works by reducing interest rates over a period of two years which will substantially help homeowners pay their mortgage payments gradually. The scheme is particularly beneficial to those who have been hit hard by the recession.
Margaret Backet, Housing minister explained that the scheme was not meant to cut down payments altogether but was rather a way to ease the payment schedule for borrowers who were facing hard times. She stressed that it wasn't a payment holiday and that the total amount due would have to be paid back.
HMS, as it is now called will be offered initially by a few of the high street banks including Lloyds, Cumberland building society, Natwest, Ultser and the National Australia bank group.
Other banks such as Barclays and HSBC have decided against opting to the scheme and have instead made their own mortgage support schemes aimed at helping redundant borrowers pay their loans without a government sponsored/backed scheme.
The government backed scheme is available to borrowers with due amounts of less than 400,000 pounds and is subject to a mortgage done before December 2008. It is also subject to a regular income within the household which makes it useless to single parent households or families where both partners are unemployed.
Regular payments have to have been made for the past five months and rates negotiated with lender prior to becoming approved for the scheme.
It is seen by many stakeholders as a welcome move by the government of the UK to ease the repossession crisis affecting the entire country.
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