The insurer says the CML has failed to secure an equitable level of state protection for mortgage lenders in both the private and rented sectors.
Sara-Ann Burgess, managing director of Burgesses, says: “The CML has been ineffectual at getting the government to make any movement on this issue.
“Both residential mortgage borrowers and lenders will suffer because of the lack of help available from the government and the CML’s inability to get the government to change its stance may end up costing numerous members of the CML very dear indeed.”
She says the CML has been ineffective at lobbying the government to improve the level of benefit offered to those unable to pay their mortgage because of accident, sickness and unemployment.
She adds that tenants get immediate and accessible help if they can’t pay their rent and that the disparity between the help available to borrowers in the private sector and tenants in the rental sector means there is a safeguard for landlords, which will help them to meet their mortgage commitments.
Burgess says: “This is an issue that the CML should have been pushing harder to resolve.
“Mortgage payment protection insurance has not created the safety net that the government had hoped and the lack of state funded aid means residential mortgage lenders will have to pick up the cost of defaults because of accident, sickness and unemployment.”
The CML says that it’s lobbying has been effective as is evident from last week’s changes to Income Support for Mortgage Interest.
The programme now provides eligible unemployed mortgage holders with assistance after 13 weeks instead of the previous 39.
The changes take effect in April 2009.