Mortgage News
BSA seeks out strategy for repossession safety net
The Building Society Association (BSA) is rallying the market to find a strategy to fill the void left by government cut backs and rising MPPI premiums to safeguard home owners against repossession.
The mutual trade body commissioned ex-BBC and renowned consumer finance journalist John Howard today to carry out the wide-ranging research, it exclusively revealed to Mortgage Solutions.
Howard has been tasked to survey the market including lenders, insurers, debt advice charities and government departments to put together proposals for a new approach to creating a buffer for struggling UK home owners.
Paul Broadhead, mortgage policy head at the BSA, said: “We need to find a strategic approach to assess where the private sector ends and the public sector begins.
“I believe that it is important that private sector and public sector safety nets are looked at holistically, rather than in isolation, in order to deliver the best value for consumers and to reduce confusion.”
He added” What we don’t want Howard to do is present ideas for a product. It has to be something consumers want and insurers can provide. The problem with MPPI and PPI are that the products are sold instead of being sought out by the consumers themselves.”
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Broadhead said the BSA planned to use the 10,000 word report’s conclusions to create a delivery group for the strategy after publication in October.
As unemployment rises, MPPI – also known as Accident Sickness and Unemployment (ASU) – premiums rose in tandem to record levels in March.
On 20 July, coalition housing minister Grant Shapps announced plans to cut funding for the Mortgage Rescue Schemes for homeowners struggling with repayments. The scheme will continue but will have to offer better value for money, he said.