Mortgage interest relief for UK homeowners in default
By Gerorge Parker and Jane Croft
Published: December 3 2008 15:49 | Last updated: December 4 2008 08:05
The article appeared in the Financial Times. Here are the key points of the new program accounted by the UK Prime Minister.
Homeowners facing the threat of repossession were on
Wednesday offered a government lifeline in the form
of a £1bn scheme that will allow mortgage interest
payments to be deferred for up to two years.
Though the PM claims that 8 banks had signed up for
the new program the FT reports:
Banks said they remained in the dark about important
elements. However, the Council of Mortgage Lenders
insisted it would not be a “charter for ‘won’t pay’
borrowers”.
The plan is different because it reaches much more
into the middle class or the folks with higher
mortgages.
Mr Brown’s plan, broadly welcomed by lenders, would
help those on “middle incomes” with mortgages of up
to £400,000 and with less than £16,000 of savings.
In particular, it would apply to those whose interest
payments were not covered through the benefit system,
such as dual-income households where one earner loses
their job, or where overtime earnings
disappear.
