Main points of the scheme
THE main recommendations of the final report of the government-appointed mortgage arrears and personal debt group:
- A deferred interest scheme should be introduced for borrowers who can pay at least 66pc of the interest. Lenders representing more than half of the market have agreed to take part in a scheme along the lines of the group's proposal.
- Lenders should consider facilitating borrowers in negative equity who wish to trade down.
- Where a mortgage has not been paid for 18 months or more, the family should be assessed for social housing before repossession takes place.
- A mechanism should be put in place to allow repossessed borrowers to remain in their homes until the housing authority can find other accommodation.
- The group has not recommended debt forgiveness, nor a state mortgage-to-rent scheme.
- New bankruptcy legislation should be introduced, and a statutory non-judicial debt settlement system should be set up.