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Letter: You Say - Mortgage suggestion.

Byline: Frank Guest

IT is very disturbing to see the stories every day of people losing their homes due to repossession. It is all so reminiscent of the situation the country faced whenwe had the last recession.

In addition, of course, last time we had the heavy burden of mortgage rates of up to 15%.However, this time I think it is worse because of the lack of discipline by the banks in their lending practices and the number of people over-extending themselves financially.

Why doesn't the government adopt a policy of buying up some of the equity that struggling home owners and the mortgage lenders own? For example, why don't they buy, say, 25% of the current value of property where the mortgagee is falling into arrears with the money going to the mortgage company? The mortgage company could then reduce the payments of the mortgagee to reflect the reduced amount owing.

This action would hopefully allow the mortgagee to keep their home and pump money back into the bank's coffers.

If at some future date the mortgagee decided to sell the property the original 25% tax payer investment or 25% of the selling price (whichever is greater) would become immediately repayable above and beyond any debt owed to the mortgage company, thus ensuring the tax payer's investment is safeguarded against property values declining even further, and enhanced should property values increase in the future.

Frank Guest, Moreton
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Title Annotation:Letters
Publication:Liverpool Echo (Liverpool, England)
Date:Feb 6, 2009
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