Mortgage repayments missed by 1 in 12

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Mortgage repayments missed by one in 12

New figures show that more than 900,000 homeowners failed to make at least one repayment in the past six months

James Charles


More than 900,000 homeowners have missed at least one mortgage repayment in the past six months, a 95 per cent increase on the same period last year, according to research by Moneyexpert.com, the comparison website.
Experts warn that the huge jump in missed repayments suggests that current estimates by the Council of Mortgage Lenders for 75,000 home repossessions over the next year could be too conservative.
Sean Gardner, director of MoneyExpert.com, said: "Missing a mortgage payment is about as serious as it gets and is a clear signal that your finances are at breaking point."
With the economy in recession, homeowners are expected to be put under huge financial strain over the next 12 months. Unemployment figures are soaring: the jobless total rose by 131,000 to 1.92 million between September and November last year, according to the latest figures from the Office for National Statistics.


Even though the Bank of England is expected to cut interest rates to 1 per cent on Thursday, mortgage costs remain high for many households.
Mr Gardner said: "The Bank of England has put interest rates at an historically low level, so there’s no reason why mortgages should remain prohibitively expensive. Unfortunately, many banks and building societies have not yet mustered up the courage to offer decent rates to anyone without a large stack of equity to stump up as a deposit.”
The Centre for Economics and Business Research has predicted that house prices could fall by 40 per cent from their peak in August 2007 if the Government does not resolve the freeze on new mortgage lending. It warned that house prices could remain at 2003 levels until 2013, leaving millions of homeowners in negative equity, with the value of their property being less than their mortgages.
Citigroup, the American bank, estimates that three million UK homeowners could be trapped in negative equity by the end of the year.
The Government has announced a series of initiatives to support homeowners struggling to meet their mortgage commitments. However, the fine print of proposals to allow homeowners to defer interest payments for up to two years is still being debated by lenders and the Government.

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Re: Mortgage repayments missed by 1 in 12

Mortgage Rescue Scheme Rolls Out


8:59am UK, Friday January 16, 2009
Thousands of families facing repossession can now get help to stay in their homes under a mortgage rescue scheme being rolled out across England.

Struggling homeowners are urged to speak to their lenders as soon as possible

The £200m initiative allows vulnerable households to reduce their monthly mortgage payments by selling a share in their homes to a housing association.
Struggling homeowners can also sell their properties to the association outright and remain in it as tenants on subsidised rents.
First announced as part of a package of help for homeowners in September, the scheme has already been taken up by 80 councils.

The clear message for households struggling with their payments is to speak to their lender as soon as possible.

Housing minister Margaret Beckett

But it has now been expanded to all local authority areas in England.

Housing minister Margaret Beckett said: "For the most vulnerable households, the mortgage rescue scheme will be available across England to help ensure they can remain in their homes.
"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."

She added: "Whatever the situation, the clear message for households struggling with their payments is to speak to their lender as soon as possible."
The rescue scheme is targeted at households with incomes of less than £60,000 a year who would be entitled to be re-housed under homelessness legislation.
Such homeowners are elderly, disabled or have children.
The Department for Communities and Local Government predicted that it will help up to 6,000 households avoid repossession during the next two years.
The Council of Mortgage Lenders has previously predicted that 75,000 people will have their homes repossessed in 2009.

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Re: Mortgage repayments missed by 1 in 12

Homeowner Mortgage Support Scheme – will you be eligible?

Writes Hazel Cottrell

The government has revealed details of its scheme to support homeowners in financial difficulty, but there are still many questions to be answered.
The government yesterday gave further details of the proposed Homeowner Mortgage Support Scheme, part of a raft of proposals it is introducing to avoid massive repossessions in the UK.
Full details have not yet been clarified and one crucial factor seems to be whether your status as unemployed is considered temporary or permanent, although how this will be judged it yet to be revealed.
The latest release states:
“The scheme will allow lenders to reduce a borrower’s current monthly mortgage payments, with the deferred payments rolled up, added to the principle, and paid at a later date when the borrower’s financial circumstances improve.”
“The government will guarantee the lender against a proportion of any loss incurred on the deferred interest payments in case the borrower defaults.”


The statement also lists a number of further eligibility criteria for the scheme. You can find a full list on the HM Treasury website (www.hm-treasury.gov.uk) but the most significant are as follows:

• Your mortgage is no more than £400,000.
• You have less than £16,000 in savings
• You have fallen into arrears for a number of months
• You have been in dialogue with your mortgage lender and are making some level of regular payment
• You have received financial advice from a third party to determine your eligibility for the scheme.

Chris Eagle, commercial manager at CreditChoices.co.uk said: “The details that have so far been released are incredibly vague and pose twice as many questions as they answer.
“It’s significant to note that while the Council of Mortgage Lenders (CML) has estimated that repossessions could top 75,000 next year, last week housing minister Margaret Beckett suggested that the new government scheme is only expected to help around 9,000 borrowers.
“Clearly this scheme, if it does come to fruition, will only be made available to a fraction of those facing repossession. If you are currently struggling with mortgage repayments, you can’t necessarily rely on this scheme to help, so it’s essential you seek independent advice.”