Friday, May 01, 2009

Government's mortgage rescue schme has only assisted one family

Government's mortgage rescue scheme has only assisted one family: "It was announced with much fanfare in September at the height of the banking crisis - the government's big idea to stop vulnerable people being thrown out of their homes. But yesterday it emerged that the mortgage protection scheme has so far helped just one family across the whole of the UK.

The shadow housing spokesman, Grant Schapps, seized on the figures, saying they revealed the rescue scheme, which was expected to cost £285m and help 6,000 families over the next two years, to be a sham. 'Thousands of families have looked to Gordon Brown for help to survive his recession and he's looked the other way. He got us into this mess and he needs to help ordinary families through it,' he said.

A government spokesman said local councils were now actively considering applications for the scheme from more than 450 other families, and insisted it had always expected it to take three months to get off the ground.

Under the scheme, homeowners struggling with their repayments should be able to sell a share of their property - or all of it - to a social landlord and rent it back, enabling them to stay in their home instead of facing repossession.

The basic idea is perfectly straightforward and simple, and is Green Party Policy, called the Right to Rent. You lose your job, you cannot afford the mortgage, the Government takes over the mortgage, you pay an affordable rent, and get to stay in your house. The mortgage still gets paid, so the mortgage lenders do not collapse under the weight of their derivative "guarantees". Everyone is happy.

Except it has not been rolled out. Why not? I do not know the answer, but the word "Incompetence" springs to mind. Government has shovelled billions into the banks, but cannot get it together to direct a few millions into the real economy.

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