Over last year, the British government announced a scheme to help families facing foreclosure reduce payments because of loss of income. The scheme moved into effect, helped hardly any families, and cost taxpayers millions of pounds.
Homeowner Mortgage Support Scheme
The Homeowner Mortgage Support Scheme, or HMS, was announced over last year with much fanfare from the government. HMS was supposed to help struggling borrowers stay inside their homes as the economy and unemployment rates were at the worst levels in years. The scheme allows homeowners to reduce their mortgage payments for approximately 2 years due to loss of income. The scheme has only managed to help 15 families but has still cost 2.5 million pounds. With the average home cost being $165,000, the us government could have saved money by simply purchasing the homes outright for the families.
Where would be the Struggling Families?
HMS is simply one government program meant to help struggling homeowners. Other programs have helped families get equity loans to reduce their mortgages or to sell their homes and stay in them as tenants. Government scheme Even though 1 in 1000 households is in peril of repossession, hardly any have needed the kind of help made available from HMS because other programmes are better suited to their needs. HMS is never as helpful as expected.
Where Did Most of the Money Go?
Even though the government has spent 2.5 million pounds to help only 15 families, they still defend the program. A lot of the cash spent was said to own visited one-time set-up costs and won’t need to be spent again this year. Money was also spent on broader policies and development. Currently, there are still 1000s of homeowners in peril of repossession that may benefit from HMS and the us government believes that the safety net will soon be needed by more families next year.
Could be the Scheme Working?
Even when a number of the money spent on HMS was one-time costs of development and policy work, this program may not necessarily be effective. At the present per-family rate, HMS has spent more income helping 15 families reduce mortgage payments just for 2 years then your 15 homes cost. Probably the development of the plan was faulted from the start, with initial costs being too high. Continuing this program seems want it may happen and the us government says more families will utilize the safety net in 2010. It is left to be seen if the per family cost will soon be reduced to a fair level that really makes sense. It can be a surprise that if other programmes are utilized more regularly, why this programme is continuing as there are undoubtedly ongoing costs connected with the scheme.