(2) what eligibility criteria will be applied to applicants to the Mortgage Rescue Scheme.
The Government are determined to do everything possible to ensure stability and security for those affected by the downturn in the housing market.
For the most vulnerable home owners, who would be owed a statutory homelessness duty if repossessed, we opened the Mortgage Rescue Scheme in January 2009. This £200 million scheme will help up to 6,000 households remain in their homes. The scheme is targeted on families, the elderly and other vulnerable households.
On 3 December 2008, the Prime Minister announced additional support for home owners facing financial difficulties through a new Homeowners Mortgage Support Scheme. The new scheme should enable households that experience a significant and temporary loss of income as a result of the economic downturn to defer a proportion of the interest payments on their mortgage for up to two years, providing they meet the scheme eligibility criteria. The Government will guarantee the lender against a proportion of any loss incurred on the deferred interest payments in case the borrower defaults. The guarantee will not apply to deferred payments of capital.
I wrote to lenders detailing the proposed key elements of the scheme in December. This letter is available at:
and we will shortly publish confirmation of the final scheme description.
Legal authority to proceed with the scheme was obtained in the Banking Act, which received Royal Assent on 12 February 2009.