Scheme not a quick fix

Housing minister Margaret Beckett finally launched the government\'s long-awaited Homeowners Mortgage Support Scheme last Tuesday - nearly five months after it was first announced.

The initiative, which has garnered widespread support among lenders in principle, means clients of major banks will get help if they lose their job, cutting their mortgage interest payments for up to two years.

Lloyds Banking Group, the Royal Bank of Scotland Group, Bradford & Bingley and the National Australia Bank Group are members of the scheme. Barclays, HSBC and Santander are offering comparable arrangements to customers.

Help may be at hand but it’s hardly a ‘get out of jail free’ card and clients need to be made aware of this. Not everyone will qualify and at some point arrears will need to be repaid.

Richard Mason, managing director at Moneyextra.com, was quick off the blocks to spot other potential problems, arguing that the scheme was merely delaying the inevitable.

“Home owners are likely to find themselves burdened with higher repayments in two years than they would otherwise be facing now, thus eradicating any initial savings garnered,” he says. “My advice to debt-ridden home owners is to seek expert help and consider downsizing if remortgaging is not an option.”

This is excellent advice and shows how you can help clients facing repossession. With unemployment levels rising daily and at their highest since 1997, times are only going to get tougher.