How Mortgage Rescue Scheme is helping struggling borrowers facing repossession

Date: 2009-08-17 11:30:18 , Category: Repossession

Launched in January 2009, the Mortgage Rescue Scheme is meant to help home owners facing repossession to sell a part or all of their property to a social landlord. These social landlords include local council or a housing association.

The idea is to then rent the house back from them for a period of time. In other words this gives the home owner to enter the property into a shared ownership scheme with the social landlord.

Initially this scheme was launched just for families facing repossession. However later the government extended the scheme to those in negative equity as well.

Sadly, the scheme has not been a thumping success it was meant to be. Despite good intentions and a rather large budget (£180 million), the rules are so complex and paperwork so stringent that only six families had been able to save their homes under this scheme in the first 6 months.

It is hard to imagine that the reason for relative lack of success for this scheme is due to the lack of enthiasm among landlords. With government's money and help, most landlords will be happy to acquire whole or part of an asset. It is probably due to over complex rules guiding the scheme that have failed to help those who need it the most.