It helps borrowers cut their mortgage interest payments for up to two years
23rd April 2009: The Government has introduced new support to help homeowners remain in their homes if they fall on difficult times. The support is already available, Housing Minister Margaret Beckett has said.
Homeowners Mortgage Support (HMS) will enable eligible borrowers who suffer a temporary loss of income to cut their mortgage interest payments for up to two years to help them get back on track with their finances.
This new support will be available throughout the UK and builds on a range of measures the Government has already put in place to ensure that repossession is always a last resort.
The following major high street lenders now offer their customers HMS: Lloyds Bank Group (which includes Halifax and Bank of Scotland), Northern Rock, the Royal Bank of Scotland (which includes NatWest and Ulster Bank), Bradford and Bingley, Cumberland Building Society, and the National Australia Bank Group (which includes Clydesdale and Yorkshire Bank).
A number of other banks, building societies and specialist lenders have also confirmed that they will offer their customers HMS as soon as possible. These are Bank of Ireland (which includes Bristol and West), GMAC, GE Money, Kensington Mortgages, the Post Office and Standard Life Bank.
Lenders offering HMS will have the security of a Government guarantee if the borrower defaults.
At the same time, four other high street lenders, Barclays (including First Plus), HSBC, Nationwide and Santander (including Abbey and Alliance and Leicester) have all confirmed they will offer comparable arrangements to HMS to their customers, while opting not to take up the Government guarantee.
Customers of these institutions experiencing a reduction in income and willing to make regular monthly payments will receive a similar level of support and be encouraged to seek independent money advice.
As a result of this new initiative, lenders covering more than 80 per cent of the mortgage market will now be providing enhanced support to their customers. Borrowers will receive independent money advice as part of these changes to help them make the right decisions for their circumstances.
"We know that many families are worried about how to pay the mortgage right now, and we’re determined to ensure there is real help available for them,” Ms. Beckett said.
She said that the new support “will help borrowers who just need a bit more time to get themselves back on their feet. The clear message to borrowers is to contact your lender straight away if you’re concerned about how to pay the mortgage as often a solution can be found."
While welcoming the introduction of HMS, Citizens Advice Director of Public Policy, Teresa Perchard said: “It is vital that anyone who has experienced a reduction in income speak to their lender straight away. All lenders should provide an understanding and constructive response and help their customers come to a manageable solution, taking into account the customers circumstances and ability to repay their debts and this scheme requires borrowers to have stuck to an agreed repayment plan before being considered.”
More information for consumers on Homeowners Mortgage Support can be found at http://www.direct.gov.uk/hms