Wednesday, 22 April 2009

Preventing repossession

The announcement yesterday (21 April) that the UK Government's Mortgage Support Scheme is now in force with most lenders co-operating, and sub-primes coming on board, is the best news we've heard in a long time during this dark economic period.

The ability to defer up to 70% of a mortgage for two years will provide a vital respite which could save thousands of Scottish homes from being repossessed during the recession. Sadly, most Scots won't be able to enjoy this new scheme as repossession cases do not call in court and, unless you are proactive and instruct a solicitor, decree will pass against you automatically.

You will face homelessness long before you can sort out all of the paperwork. Community law centres and others have been warning the Scottish Government of the weaknesses in our system for the past 15 months, yet, incredibly, protection for homeowners has become weaker, not stronger.

For example, last month the Scottish Government restricted its Homeowner Support Scheme to homeowners in the cheapest of dwellings. Also excluded are those entitled to benefits for housing costs.

With all of these restrictions, I would be surprised if 15% of Scottish homeowners were eligible for any help under the Scottish Government's scheme. Yet the new UK Government scheme will cover 80% of UK homeowners.

However, help is hypothetical as legal representation is required to secure sufficient time to put solutions in place. Households in England and Wales are entitled to free court representation, so they can access the new UK scheme and other solutions. They also have more time to negotiate with their pre-action court protocol.

In Scotland, there is no free representation and even people on breadline benefits are expected to fund their own legal aid bills. There is no pre-action protocol either. The result is that Scottish homes are being needlessly repossessed. The Scottish Government has provided homeowners with a couple of fig leaves for protection against repossession. This has to change. When will we get the same protection that homeowners south of the border enjoy?

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