Following a dramatic increase last year, in the number of homeowners who were experiencing difficulty in keeping up with the repayments on their homeowner loans, due to the effects of the credit crunch, the Government announced a range of plans which would be introduced to help borrowers to avoid the problems of loan arrears and possible repossession proceedings. 

The final details of the homeowners mortgage support package were announced last week, although the government are still in discussions with lenders over some of the details.

The scheme will offer financial assistance to borrowers who have suffered a temporary loss of income from their main employment, which will mean that they are unable to meet the full repayment amount of their homeowner loan.

In order to qualify for the scheme, borrowers must have been making some level of repayment on their loan, which has been agreed by their lender, for a minimum of five months.

The Housing Minister said “We are determined to do everything possible to ensure repossession is always a last resort and are taking action to give real help to households most in need. Our mortgage rescue scheme is up and running, more free legal and debt support is available than ever before and we have increased financial assistance to help people pay their mortgage if they’ve lost their job.”

The full scheme is expected to be rolled out in April this year, once the final details have been agreed, but with the Council of Mortgage Lenders (CML) announcing that there were a total of 40,000 repossessions due to loan arrears throughout the course of 2008 and with the figure for the current year expected to be much higher, help can not come soon enough for the large number of borrowers who are currently unable to maintain their homeowner loan repayments and are building up increasing levels of loan arrears.