Monday, August 03, 2009
Housing Letter
Input by Margaret Rose
This blog is in regard to an item Leslie Turner feels is of interest and has asked to be posted.
Mortgage Rescue
LHG Supports Homesaver Proposal
by Kerry Pollard
Current Government Mortgage Rescue schemes, welcome though they are, only cover a small proportion of the expected repossessions forecast during this year. The gap between rescue provision and expected need is around 60,000. In addition it is forecast that there will be up to 500,000 borrowers with mortgage arrears of up to three months - potential repossessions.
It is vital that Government bring forward an initiative that will bridge this gap.
Saoh a scheme has been-designediiy A group, including Kerry Pollard and Graham Martin, (both LHG executive
members). The scheme is called Home Saver, is not for profit, third sector delivered, includes non secured debt, has no cost to the public purse and brings much needed stability to both the banking and housing sectors as well as keeping many thousands of families in their homes.
The essence of the scheme is that mortgage payments will be topped up to ensure that the lenders receive full payment thus helping them with their balance sheets and cash flow whilst, most importantly, keeping people in their homes. A full 360 degree financial review of each person referred will take place to include secured and unsecured debt and then a payment profile agreed that is affordable with the shortfall being made up by Home
Saver. This process can last up to 7 years during which time stability will have returned and the borrower be in a position to resume his full obligation, or if not can be helped into more suitable accommodation. Each individual will have regular reviews and as individual circumstances improve can exit the scheme at any time.
The scheme is funded by a unique bond swap. As cash flows to lenders are secured via Home Saver there would be an immediate improvement in the value of mortgage bonds, with the lower rated bonds increasing most. It is estimated that £80bn would accrue to lenders bonds, top slicing this by 10% would release £8bn, which would more than fund Home Saver.
So it is the lenders who would pay indirectly for the scheme, at no call at all on the public purse. There would be a healing effect on banks balance sheets, more stability in the housing market, a positive benefit to PSBR and most importantly many thousands of families would not lose their homes.
Home Saver would virtually eliminate all mortgage repossessions.
Home Saver would have a positive impact on our Governments standing - this could win the next election for Labour.
This blog is in regard to an item Leslie Turner feels is of interest and has asked to be posted.
Mortgage Rescue
LHG Supports Homesaver Proposal
by Kerry Pollard
Current Government Mortgage Rescue schemes, welcome though they are, only cover a small proportion of the expected repossessions forecast during this year. The gap between rescue provision and expected need is around 60,000. In addition it is forecast that there will be up to 500,000 borrowers with mortgage arrears of up to three months - potential repossessions.
It is vital that Government bring forward an initiative that will bridge this gap.
Saoh a scheme has been-designediiy A group, including Kerry Pollard and Graham Martin, (both LHG executive
members). The scheme is called Home Saver, is not for profit, third sector delivered, includes non secured debt, has no cost to the public purse and brings much needed stability to both the banking and housing sectors as well as keeping many thousands of families in their homes.
The essence of the scheme is that mortgage payments will be topped up to ensure that the lenders receive full payment thus helping them with their balance sheets and cash flow whilst, most importantly, keeping people in their homes. A full 360 degree financial review of each person referred will take place to include secured and unsecured debt and then a payment profile agreed that is affordable with the shortfall being made up by Home
Saver. This process can last up to 7 years during which time stability will have returned and the borrower be in a position to resume his full obligation, or if not can be helped into more suitable accommodation. Each individual will have regular reviews and as individual circumstances improve can exit the scheme at any time.
The scheme is funded by a unique bond swap. As cash flows to lenders are secured via Home Saver there would be an immediate improvement in the value of mortgage bonds, with the lower rated bonds increasing most. It is estimated that £80bn would accrue to lenders bonds, top slicing this by 10% would release £8bn, which would more than fund Home Saver.
So it is the lenders who would pay indirectly for the scheme, at no call at all on the public purse. There would be a healing effect on banks balance sheets, more stability in the housing market, a positive benefit to PSBR and most importantly many thousands of families would not lose their homes.
Home Saver would virtually eliminate all mortgage repossessions.
Home Saver would have a positive impact on our Governments standing - this could win the next election for Labour.
Labels: Housing
# posted by Labour : Monday, August 03, 2009
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