Ward has written a paper entitled ‘Kick-starting the mortgage market’ which will be sent to key government figures this week.
The key recommendations contained within the report include the need for the government to move away from focussing on funding models and provide support at mortgage level instead.
Ward argues that government guarantees for mortgage lending above 75% LTV and up to 95% LTV would work on the basis of the lender and government sharing the risk of higher LTVs.
Both parties would then have a shared interest in minimising risk on these loans.
He also wants to see the current surplus of mortgage-backed securities being removed from the system, in order to set “proper values” to new issues.
Tony Ward, chief executive of Home Funding, says: “Some excellent thoughts have emanated from the Bank of England and the Treasury but there is a real risk they will get bogged down in the detail of how things operate at a micro level.”
He adds: “We shouldn’t try to fix banking; instead we need solutions that put money directly into the hands of struggling home buyers and owners.
“By attaching a guarantee to mortgages we can move away from worrying about whether banks or non-banks should be assisted and look to a more holistic approach to assist our ailing economy.”