The scheme, arranged by the Government with the UK’s major mortgage lenders, means borrowers suffering a loss of income can cut their mortgage payments for up to two years to help them restore their finances.
The British Bankers’ Association’s executive director for retail, Eric Leenders, said: “The banks have made a number of strong commitments in recent months to help their customers through the worst of the financial downturn. Responsible homeowners should feel confident that every action is being taken to ensure they can remain in their homes while their finances are restored. Homeowners should remember that repossession is always absolutely the last option for banks: repossession rates by high street banks remain significantly lower than those of other lenders.”
Lloyds Banking Group, the Royal Bank of Scotland Group, Bradford and Bingley and the National Australia Bank Group are all members of the Government scheme, and Barclays, HSBC and Santander are offering comparable arrangements to their customers.
Building societies have confirmed that they have signed up to a Customer Commitment for borrowers in financial difficulty.
Customers experiencing a reduction in income and willing to make regular monthly repayments will receive a similar, if not greater, level of forbearance to that provided under the Homeowner Mortgage Support Scheme (HMSS) and be encouraged to seek independent advice.
Paul Broadhead, Head of Mortgage Policy at the BSA, commented:-
“Borrowers should have every confidence that, if they are a customer of a building society, the Customer Commitment means they will receive at least as much help as is available under the HMSS. This further confirms the building society sector’s commitment to borrowers in difficulty. It builds upon the recently published booklet produced in conjunction with the Money Advice Trust providing advice to borrowers in difficulty.
“We look forward to continuing to work with the Government on this and other schemes to help hard pressed borrowers.”
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