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  1. #1
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    Info Struggling homeowners to get mortgage 'holidays'

    Interest payments may be deferred for up to two years
    By Andrew Grice, Political editor
    Thursday, 4 December 2008

    A scheme to prevent middle classes having their homes repossessed in the recession has been announced in a surprise move by Gordon Brown.

    People with a mortgage of up to £400,000 and savings of less than about £16,000 will be able to defer interest payments on their mortgages for up to two years if they suffer a significant loss of income such as losing a job or overtime payments during the downturn.

    The Government will guarantee the deferred interest payments under a deal reached with eight banks responsible for seven out of 10 mortgages. People on repayment mortgages will also be encouraged to switch to interest-only mortgages. As well as wanting to keep people in their own homes, ministers are worried that fear of repossession is harming confidence and economic activity. The Council of Mortgage Lenders says the number of repossessions will rise from about 45,000 this year to 75,000 next year, close to the peak reached in the recession of the early Nineties.

    The Government's potential liability for the Homeowner Mortgage Support Scheme is £1bn but the actual cost should be £100m as most of the interest payments will eventually be made. Existing help with mortgages is targeted at jobless people who have a mortgage of up to £200,000. The extra help may encourage people who lose their jobs to take a lower-paid job rather than rely on state benefits.
    Mr Brown told the Commons debate on the Queen's Speech: "Hard-working households that experience a redundancy or severe loss of income as a result of the downturn will be able to defer a proportion of their interest payments for up to two years as they get their family finances back on track."
    He said the Government would do "everything in our power" to ensure that "no hard-working family who demonstrates to their bank a willingness to pay" faced the threat of repossession. Other planks of the strategy include free debt advice at court and an instruction to judges that repossession should be a "last resort".

    Alistair Darling, the Chancellor, added: "This is real help for homeowners at risk of repossession through no fault of their own. The scheme will give people who face a temporary fall in their income the confidence that they need to rearrange their finances so they can come through a difficult period without losing their home."

    Officials said the scheme would provide breathing space for many families and would operate from the new year. Details are still being worked out with the banks, some of whom said they supported the measure in principle.

    Customers of HBOS, Abbey, Nationwide, Lloyds TSB, Northern Rock, Barclays, Royal Bank of Scotland and HSBC will be able to negotiate deferrals of up to 100 per cent of their interest payments. The Government hopes other banks will join the programme.

    Opposition parties welcomed the move but said it was more important to persuade the banks to start lending to small businesses and householders.

    Vince Cable, the Liberal Democrats' Treasury spokesman, said the last announcement on repossessions only helped one in 10 families. "Ministers must explain who is eligible for this new scheme and how the Government will deal with the legal problems which have created the potential for repossessions to go ahead without recourse to the courts."

    George Osborne, the shadow Chancellor, said: "As always with Gordon Brown, don't just look at the headline, look at the detail." The Tories claimed two banks – Lloyds TSB and HBOS – had not yet agreed to the small print.

    A Lloyds TSB spokesman, Stephen Pegge, said the plan was "welcome" as part of range of measures to help homeowners but confirmed it had not seen the details yet. "We want to work with the Government to make sure this will really work," he said.

    John McFall, the Labour chairman of the Treasury Select Committee, said the scheme was a "good initiative" but said: "This is not going to be a panacea for the housing market."

    The government-owned lenders Northern Rock and Bradford & Bingley joined Lloyds TSB in agreeing that repossession proceedings would not begin until households were six months behind on their payments. Mr Brown urged other "responsible banks" to follow their lead.

    Get smart: Mandelson’s vision
    Labour will have to deliver “smart government” as the British economy emerges from the recession with a smaller financial and retail sector, Lord Mandelson said last night.
    Giving the annual Hugo Young lecture, the Business Secretary argued that New Labour would need to revise its view on the relationship between the market and the state amid calls for greater regulation.
    The answer was not to bring back “big government” but to pursue “smart government” and market-driven industrial activism. That meant working with the market to shape networks and institutions rather than the Government trying “to run everything”. “As much as we admire the resilience of the British shopper, we all recognise that consumer spending is going to have to be driven less by debt and the British retail sector may also account for a smaller share of the economy ? public service employment is also not going to grow at recent rates.”

    Lord Mandelson suggested it would be in Britain’s interests to accept greater European Union integration: “It will force us to adapt to the idea of greater global or European governance, not least of financial globalisation.” The Government still aimed to join the euro but he suggested it would not try to fast-track membership.
    Asked if the Government’s five tests had now been met, he replied: “Good question.”


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  2. #2
    DF Super Moderator DJ Overdose's Avatar
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    Default Re: Struggling homeowners to get mortgage 'holidays'

    More rule bending...

    I didn't over borrow for my property. I don't need to defer anything.

    Just because chavs over borrow to buy chavingham palace they get a fkin mortgage holiday.

    It's as crazy as sending drunk violent teens on holiday to the Bahamas...


    DJ OD


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  3. #3
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    Default Re: Struggling homeowners to get mortgage 'holidays'

    "BRITAIN is to take the next two years off to go travelling and focus on its hobbies.


    'Oh no, I've been made redundant'
    With the government now willing to pick up the tab for everything, millions of Britons are this morning telling their bosses to piss up a rope.

    Stephen Malley, a soon to be ex-accountant from Bristol, said: "I'd like to spend some time in China, I'd like to learn how to play the bongos, and I'd like to write a collection of short stories about a sexy west country accountant who solves crimes.

    "But I suspect I'll probably just get in a load of crisps and Fanta and watch my Battlestar Galactica DVDs with my hands stuffed down the front of my pyjama bottoms."

    He added: "I've always said that the one thing that's been holding this country back is consequences.

    "Does it make me more likely to vote Labour? Possibly. But I'm not sure I'll have time to vote, what with all the Battlestar Galactica, and yes, the masturbation."

    Prime minister Gordon Brown said that depending on the length and depth of the recession, the government would consider extending the removal of consequences to energy bills, TV licences, road traffic accidents and murder.

    Mr Brown added: "I am very aware that one of the most traumatic effects of an economic downturn is not being able to kill anyone you want to without the police asking lots of annoying questions.


    "I want to make sure that funding is available for all those who need to flee the country at short notice with a new identity and a large prosthetic nose."


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  4. #4
    DF Super Moderator Over Carl's Avatar
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    Default Re: Struggling homeowners to get mortgage 'holidays'

    I can agree with it to some extent, but I definitely don't agree with the 400k cap.

    It's like my mate who was renting a 3 bedroom house for himself, when he lost his job, he was getting just over £800 a month in housing benefit alone as the amount was based on property size. Benefits and the like in my book should be for absolute neccessities. He didn't need to live in a 3 bedroom house as much as I'll bet most people who use this scheme don't need a £400k house.

    I also think there should be some type of thing where if people wanna apply, their finances get looked at. If their idea didn't look solid and well planned, no help.

  5. #5
    DF PwNagE liveseytowers's Avatar
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    Default Re: Struggling homeowners to get mortgage 'holidays'

    All this about the government covering every ones back is doing my nuts in. We'll all have to pay for it in the end and the people who are getting in trouble won't end up paying fook all! And the bit about people with repayment mortgages being encouraged to change to interest only lol Why would you do this??

    If people have over borrowed then they should have to deal with it, cut down on your outgoings like Sky TV and Broadband etc. Change your car to a cheaper one. Don't come begging to the government!

  6. #6
    VIP Member CzarJunkie's Avatar
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    Default Re: Struggling homeowners to get mortgage 'holidays'

    I think this is going too far. I'm all for trying to stimulate the economy but this is rewarding reckless borrowing and someone is going to have to pay for it in the long term. No one wants to see anyone lose their house, but in tough economic times there has to be losers as well as winners, you can't only have winners.

  7. #7
    DF PwNagE B.I.G.'s Avatar
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    Default Re: Struggling homeowners to get mortgage 'holidays'

    I never over borrowed for my mortgage i bought a house within my means but if i'm made redundant then my means change.
    I can see the logic in this as it is only a couple of years so at some point you would have to get back into work and pay it back but it pisses me off that i've been shelling out for insurance to cover myself for the last 10 years for something thats now free.

    Quote Originally Posted by CzarJunkie View Post
    you can't only have winners.
    According to "Hot chocolate" you can.

  8. #8
    DF PwNagE ant3b's Avatar
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    Default Re: Struggling homeowners to get mortgage 'holidays'

    Yeah, i have insurance for this stuff and now its free

  9. #9
    DF PwNagE flumperino's Avatar
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    Default Re: Struggling homeowners to get mortgage 'holidays'

    I really don't understand the Government's quick reaction to this.

    When house prices were insane......for years.....because the economy was booming, the govmnt didn't give a flying shit that I couldn't buy a house without taking out an overstretched, unaffordable mortgage.

    Now that things have gone bust though, all of a sudden they are interested in looking at the situation.

    The way that the whole situation has been handled over the last few years makes me very bitter.

  10. #10
    DF Super Moderator Over Carl's Avatar
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    Default Re: Struggling homeowners to get mortgage 'holidays'

    That's a very good point. I think most people would agree house prices had been inflated to an unsustainable, artificially high level. With the whole boom and bust thing, this is time for prices to drop to sensible levels by means of things such as repossessions. This could totally fuck the housing market for the forseeable future. I just hope that doesn't happen, but now I can't see why not.

  11. #11
    DF VIP Member Undertaker's Avatar
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    Default Re: Struggling homeowners to get mortgage 'holidays'

    At most house prices should be around the 2.5 to 3 times the average wage, anything more is ridiculous.

  12. #12
    DF Jedi Waka's Avatar
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    Default Re: Struggling homeowners to get mortgage 'holidays'

    Quote Originally Posted by Over carl View Post
    It's like my mate who was renting a 3 bedroom house for himself, when he lost his job, he was getting just over £800 a month in housing benefit alone as the amount was based on property size. Benefits and the like in my book should be for absolute neccessities. He didn't need to live in a 3 bedroom house as much as I'll bet most people who use this scheme don't need a £400k house.
    A mate of mine was made redundant and while you get benefit if you live in a rented house you do not get any help with the mortgage for SIX months...he nearly lost his house A stupid situation which seems too harsh for house owners, although this might change things...even if it just meant he became deeper in debt!


    W.

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    DF Jedi mysterym's Avatar
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    Default Re: Struggling homeowners to get mortgage 'holidays'

    Quote Originally Posted by Waka View Post
    A mate of mine was made redundant and while you get benefit if you live in a rented house you do not get any help with the mortgage for SIX months...he nearly lost his house A stupid situation which seems too harsh for house owners, although this might change things...even if it just meant he became deeper in debt!


    W.
    Thats what mortgage protection is for.

    I don't agree with helping people with there mortgages at all. Years of overborrowing has lead to the house prices reaching stupid levels and repossessions will help bring it all back to earth with a thump.

    You dont give to the goverment if you make money on your main home, so I don't see why the goverment should give financial support the other way

  14. #14
    DF VIP Member
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    Default Re: Struggling homeowners to get mortgage 'holidays'

    Quote Originally Posted by mysterym View Post
    You dont give to the goverment if you make money on your main home

    Stamp duty?

  15. #15
    DF Jedi mysterym's Avatar
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    Default Re: Struggling homeowners to get mortgage 'holidays'

    Quote Originally Posted by Roach-Rampino View Post
    Stamp duty?
    Stamp duty is paid on buying a property not selling? The point is if you sell your main house for a 200k profit, you don't pay tax on it.

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    DF VIP Member
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    Default Re: Struggling homeowners to get mortgage 'holidays'

    Quote Originally Posted by mysterym View Post
    Stamp duty is paid on buying a property not selling? The point is if you sell your main house for a 200k profit, you don't pay tax on it.

    No you're right but I was thinking more along the lines of you sell your existing property at a profit and buy a new (more expensive) property so will pay more stamp duty on the new one. A generalisation I know but people tend to go up the property ladder rather than down.

  17. #17
    DF Jedi mysterym's Avatar
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    Default Re: Struggling homeowners to get mortgage 'holidays'

    Quote Originally Posted by Roach-Rampino View Post
    No you're right but I was thinking more along the lines of you sell your existing property at a profit and buy a new (more expensive) property so will pay more stamp duty on the new one. A generalisation I know but people tend to go up the property ladder rather than down.
    I agree but 2-3% on a 500k house is what, 20k. I'd have thought that house price gains over the last few years have outstripped that by a large margin.

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    DF Jedi rmj2663's Avatar
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    Default Re: Struggling homeowners to get mortgage 'holidays'

    Lots of comments re overborrowing here, but on the otherside of the coin are the people being made redundant and having problems with mortgages taken 10 years ago when the market was still sluggish from the last slowdown. No overborrowing there, but in the same boat. Mortgages over 25 years and this is the second boom & bust that I have been affected by.

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