Government failure highlights possession risk By Sarah Davidson & Yuan Phoon


Just 2,600 people avoided repossession after being helped by the government’s mortgage rescue scheme, less than half the number hoped for.


the scheme, launched in


January 2009 by the depart- ment for communities and local government, aimed to spend £205m stopping 6,000 families being repossessed but ended up spending over £240m helping just 2,600 families. a damning report by the


national audit office sug- gested the government did not adequately assess likely demand for the scheme and did not act soon enough to improve value for money. the scheme allowed hom- eowners at risk of imminent


Weddings and partnerships


by


Robert Sinclair director AMI


as the royal wedding re- cedes into distant memory, the fact that the prince pulled a hotty with an even hotter younger sister may not be entirely lost on one of those who might be hold- ing a super injunction. if rumours are to be be-


lieved the joining of coun- trywide and mortgage next / intelligence will not be the last trip to the altar this year. indeed even after the LSL marriages there may still be a few hotties out there in


repossession either to sell and rent back their home from a housing association or apply for an equity loan from the housing association to help them reduce their monthly mortgage payments. amyas morse, head of the


nao, said: “the department made assumptions about the level of demand for the mort- gage rescue Scheme and made the wrong call. there was more need than


expected for more expensive support and less for the rela- tively low cost rescue option.” dcLg anticipated a higher demand for equity loans but in fact nearly all homeowners using the scheme sold their house to a housing associa- tion, raising the average res- cue cost per household from £34,000 to £93,000.


the mortgage world looking to walk down the aisle.


Lottery For those wedded to spend- ing money, those lucky enough to have won out in the ballot and secured olympic games tickets may now be wondering if their plans have come at too high a price. this was another lottery where you could randomly have got all or nothing. those who bet on only getting some could be sadly embarrassed. others will be relying on their part- nerships bringing corporate hospitality. the last month has been also been a busy one with the economy returning to limited growth, inflation reducing and then rebound- ing and employment rising.


James Watson, sales direc-


tor at Paymentshield, said: “there is clearly a call for an alternative solution. the scheme has only helped 2,600 households since its launch, whereas products such as mortgage payment protection insurance are pro- viding a real lifeline for uK households. “in the last two years we’ve


helped more than 20,000 families to stay in their own homes, assisting them through their mPPi claim.” meanwhile the council of


mortgage Lenders revealed last month that repossessions were up 15% in Q1 2011 com- pared with Q4 2010. Some 9,100 properties were repos- sessed in Q1 up from the 7,900 in Q4 2010. However the Financial


Whilst unemployment fell, the long term trend still looks difficult. all of this makes the like- lihood of a base rate rise less likely until november, with the smart money on that be- ing the first and base rates being no more than 1.5% by the end of 2012. Some commentators are nervous of those who they think will struggle with much higher interest rates. agreed. But where is the indication that we are going to see these rates any time soon?


Financial Services Bill the next job at the associa- tion of mortgage intermedi- aries is to commence work on the new Financial Ser- vices Bill, approaching Par- liament. there is a real need to ensure that we achieve a


Services authority raised concerns that lenders’ fore- bearance was skewing the numbers and keeping people in their homes. the cmL estimates 40,000


home owners will have their properties repossessed in 2011 but ian Long, manag- ing director of St trinity asset management, said: “if the base rate is hiked ear- lier or more severely than anticipated, this figure may prove to be a huge underes- timate.” cmL director general mi-


chael coogan said: “Lend- ers have a range of options to nurse borrowers through temporary problems, but will clearly need to be mindful of the regulator’s concern that too much forbearance may be as bad as too little.”


more accountable Financial conduct authority, Finan- cial ombudsman Service and Financial Services compensation Scheme. Building a new structure that means regulators can and will be reasonably challenged is the task f acing us over the next 12 months. there is much to worry


about. Jobs, tax, prices, in- terest rates and bird flu. But having got the economies of the world all moving in the right direction: “the only thing to fear may be fear itself.” We can scare ourselves into what we fear most. as professionals in our market it is our job to display confidence in our role, our products and the benefits of property.


mortgage introducer JUNE 2011 5


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60