New mortgage scheme 'will not be backed by all lenders'

Date:Friday 24th April 2009
Author: Susanna Kavka

The Homeowner Mortgage Support (HMS) scheme, which came into effect on April 21st, will not enjoy universal backing among lenders, it has been claimed.

According to Bernard Clarke, a spokesperson for the Council of Mortgage Lenders, many banks and building societies will not agree to the initiative because they can already help borrowers through their own "administrative processes".

He went on to say: "For those lenders who signed up for HMS, that does not mean that individual borrowers will automatically have access to [it] – it will be for lenders to decide whether it is appropriate for the borrower to be able to enter the scheme."

The HMS enables households with mortgages worth up to £400,000 to defer a proportion of their interest payments for a period of up to two years.

A number of lenders have already signed up to it, including Lloyds Bank Group, which includes Halifax and Bank of Scotland.