Published: 13 May 2008
Support for some Home Owners
A £10mmillion package of measures to support home owners who may be facing difficulties with their mortgage, has been announced by the government.
It includes measures to ensure that financial advice & support is available for borrowers who may need it and includes an additional £9m extra funding for face-to-face debt advice provided by third sector partners including Citizens Advice Bureau.
The announcement claims it will also ensure:
- expanded access to free legal representation at county courts throughout England for households at risk of repossession
- strengthened National Housing Advice Service to provide a new comprehensive debt advice service and
- more specialist training for Citizen Advice Bureau staff and local authorities on debt advice to help families get their finances back on track
Treasury and housing ministers will meet consumer and debt advice groups this week to discuss what more can be done to help people who are experiencing difficulties with their debt repayments.
Meeting with the Chancellor last week, the 6 major UK retail banks (Lloyds, Barclays, RBS, HBOS, Abbey and HSBC) agreed to work closely with these groups to establish how best to meet customer needs, including what further financial support the industry could provide.
The mortgage industry is currently working on further improvements to its support for borrowers in difficulty including those seeking to refinance fixed rate deals, so they receive early advice and support on available options.
Following a meeting with the Chancellor last month, the CML and the FLA agreed to review their voluntary arrangements, working with consumer groups, and report to Government by the end of May.
As a result of that work the government wants to see best practice guidance that will ensure:
- people on fixed rate mortgages are given sufficient warning before their repayments change
- banks and building societies will engage with customers early to see if they can help people who are experiencing short-term difficulties by rescheduling repayments
- banks and building societies will provide advice to individuals on how they can access independent debt advice at the earliest possible stage and
- repossession will only be used as a last resort
Housing Minister Caroline Flint said:
"We know that some borrowers are concerned about their mortgages in the current market conditions. Some lenders are now passing on interest rate cuts and we want to see the rest follow as soon as possible.
But for the minority of owners who may need support and advice now, we want to ensure it is there for them in the right place and at the right time."
The Government currently funds over £200m of debt advice for individuals in financial difficulty:
These services may be accessed by mortgage borrowers experiencing difficulty with their mortgage repayments, but are not focused solely on mortgages.
The Government also provides significant support to the Money Advice Trust (MAT), a charity that aims to ensure that over-indebted individuals have easy access to appropriate (preferably free and independent) forms of debt advice.
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