Government proposals outlined in its new Mortgage Support Scheme have been criticised by moneysupermarket.com.
The comparison website has condemned the initiative – which is aimed at helping homeowners who have temporarily lost income due to the economic slowdown – for only covering a minority of homeowners needing debt help.
Head of mortgages at moneysupermarket.com Louise Cuming stated: “This scheme is virtually worthless and will benefit very, very few homeowners who may be struggling.”
Ms Cuming added that many lenders have only signed up “in principal” and will not be legally obliged to provide assistance to mortgage holders.
The scheme is a “slap in the face” to tax payers who could be referred to third-parties for debt help after their money bailed banks out, she said.
Furthermore, this would expose the lenders that “have no debt advice capability”, Ms Cuming commented.
The Treasury revealed the details of the Homeowner Mortgage Support Scheme yesterday, stating that it will only cover those who have savings below £16,000 and have taken out a mortgage of up to £400,000.
By Rosie Park