Mortgage rescue What role to RSL’s play?

23 November 2009

Kate Berryman

L&Q Background

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L&Q is one of the UK's largest housing associations.

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L&Q works with more than 90 local authorities in London and the South East.

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L&Q manages over 60,000 homes.

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It opened in 1963 and its first office was in Deptford High Street from 1970.

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Homebuy Agent – South London

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Affordable rent/IMR/ Shared Ownership/ Outright Sale

Current Climate

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9,300 new debt problem CAB each day*

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2,553 people made redundant every day*

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Every 11.5 minutes a property is repossessed*

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£4,110 a second increase in government national debt* * Credit action

Green Shoots?

What do you think?

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Mervin King: “Britain has only just started along the road to recovery”

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Longest recession in history

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Alistair Darling: “I’ve always been clear, growth will return by end of the year”

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UK retail sales “grow at fastest rate in 17 months”

What is out there to help homeowners?

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Debt advice Pre-action protocol Extra advice for households at court Local Authority preventing repossession fund (£20 million) Support for Mortgage Interest (SMI) Homeowners Mortgage Support (HMS) Mortgage Rescue (£200 million)

What is Mortgage Rescue?

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‘Last resort’ additional prevention tool

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Reduce monthly outgoings - sustainable

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2 Versions: Mortgage to Rent Mortgage to Shared Equity

What does Mortgage Rescue involve?

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Time!

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Resource heavy!

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Partnership working!

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Money!

What is the process ?

Local Authority stage Lender

Customer in Mortgage Arrears

Money Advice (MA) Local Housing Authority (LHA) Yes - Out of Scheme Lender Refers to LHA for Options Lender Applies Hardship Tools Internal Hardship Tools Exhausted LHA refers to MA for initial assessment Money Advice Given & Other Options Explored Alternative solution found MA provides support LHA Assessment & Decision on Best Option LHA assess against MR Criteria LHA visits home & Estimated Property Valuation Money Advice to provide ongoing Counselling / Support Lender agrees to MR and payment to be made. Lender freezes action, fees & AI RSL obtains RICS Valuation & completes final assessment

Rescue Candidate Found

Rescue proceeds to Completion Acceptance of Offer Type of rescue determined. Offer Letter / Agreement made Cooling Off period – Opportunity for borrower to take independent advice Courts Applicants stops payment during MR Process Unsuitable for MR Borrower declines MP LHA and/or MA to Undertake further work & explore other options Unsuitable for MR

What are the national statistics?

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Referrals to date: 796 Offers made: 186 Completions :138 HCA anticipate 350 completions before the end of December 2009.

The future?

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Continuation until 2011

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Syndication

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Flexible Tenure

Questions ?

Kate Berryman [email protected]

0844 406 9000