Government Launches Rescue Scheme For Secured Loans
You may have read last month how the Government are planning to introduce a rescue scheme for those individuals who are struggling to keep up with their repayments on their mortgage or secured loan and may be facing repossession.
The scheme, which has been piloted amongst 80 local councils throughout December last year is today being introduced to councils nationwide and will allow local authorities to buy either all, or part of a borrowers house and allow them to remain in the property, paying a regular rent instead of a secured loan.
The Government scheme works on the same principle as a sale and rent back scheme, many of which are operated by a large number of companies. These schemes have acquired a particularly bad reputation as many of them will offer a particularly low price for a property where the owner is facing repossession due to large secured loan arrears, yet there are no guarantees that the family will be able to remain in the house for a long term.
The new scheme is being funded with £200 million of tax payer’s money, as part of a larger £1 billion loan rescue package and should be much safer for homeowners who take up the scheme, as it is guaranteed by the Government.
It is expected that the new scheme will help up to 6,000 families over the course of the next two years, who may be facing repossession due to arrears on their secured loan, to remain in the property.
Margaret Beckett, the housing minister said “This is part of a range of measures the government is putting in place to help households at risk of repossession in the current climate. As well as expanding free debt and legal advice, we have increased the support available for people who lose their jobs and are introducing the option for homeowners to defer part of the loan to give them the time they need to get back on their feet.”
