Mortgage rescue scheme 'won't cure debts'
Mortgage rescue scheme 'won't cure debts'
Wednesday 28th January 2009
Designed to help vulnerable householders avoid repossession, the scheme allows not-for-profit housing associations to purchase properties from people unable to meet the mortgage payments.
The residents can then remain in the property as tenants or use an equity loan from the housing association to stay on as owners.
However, head of personal finance at fool.co.uk David Kuo claimed that householders finding it difficult to manage their mortgage debts should not become "complacent" over the scheme.
"The rescue plan is no cure-all and there are a number of restrictions on the scheme," Mr Kuo warned.
He added: "There is inevitably a lot of red tape and so if somebody loses their job today, rather than take some kind of immediate action they apply for a mortgage rescue plan and who knows how long it actually takes."
The mortgage rescue scheme was devised last year by the National Housing Federation and the Council of Mortgage Lenders.
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