Government Help With Homeowner Loan Arrears Likely To Kick In This Year
As the current economic situation in the UK seems to be getting worse, with the unemployment figures increasing and looking as though they will increase further yet, it is likely that a large number of borrowers with homeowner loans will struggle to maintain the repayments on their loan during 2009 and it is likely that we will see a dramatic increase in arrears and even repossessions.
The Council of Mortgage Lenders has predicted that there will be somewhere in the region of 75,000 homes repossessed during this year.
In order to try and combat the effects of increasing loan arrears, many borrowers are expected to turn to the government for help and take advantage of their Homeowner Mortgage Support Scheme, whereby someone facing repossession due to arrears on their homeowner loan through unemployment is able to defer their interest repayments for a period of up to two years.
Although this scheme has received mixed reactions from financial experts, it is expected to prove popular with homeowners who are facing a desperate situation.
The Building Societies Association (BSA) has said that although the scheme will be useful for many borrowers, it is not likely to help as many people struggling with their homeowner loan as the government expects and that someone who may be concerned about their loan repayments should contact their lender as soon as they possibly can before the situation gets too bad.
Paul Broadhead of the BSA said “For building societies, taking possession of a property really is the last resort. They maintain good relationships with their customers to ensure that they can develop individual solutions to arrears problems and this scheme could represent an important new tool for them.
As such we look forward to continuing to work with the Government as the scheme is developed further to ensure that it adds value over existing practices and that the most vulnerable borrowers in need of help are able to receive it.”
