20 March 2009
Saffron Building Society embraces the ethos of the Homeowners Mortgage Support Scheme, but at this stage intend to opt out.
Saffron Building Society have today announced their intention not to sign up to Homeowners Mortgage Support Scheme, on the grounds that their management process for borrowers in difficulty already supports vulnerable customers on a case-by-case basis.
The Homeowners Mortgage Support Scheme is a Government initiative, designed to ensure that hard-working households who experience temporary income shock are able to remain in their homes. Those eligible will revert to an interest-only mortgage and maintain a reduced level of payment. The Government will then guarantee lenders against a proportion of any loss incurred by the deferred payments, should the borrower default and the property be repossessed.
Chief Executive Andy Golding said:
"We strongly support the principles of any scheme which aims to help borrowers who suffer difficulties paying their mortgage, due to unavoidable temporary changes in their financial circumstances, however having reviewed the scheme in depth, we do not feel that it will improve what we do for our members should they find themselves in difficulty and we have concerns that the reporting and administration requirements under the scheme are overly burdensome, especially as we do not believe that this scheme is likely to provide any additional help to our borrowers."
He added:
"As a regional lender, with an expectation that very few of our borrowers would qualify for the scheme, we feel we would better serve our members by maintaining our excellent current processes. That isn't to say that we believe the basis of the scheme to be wrong, in fact I commit that Saffron will at least do all the things the scheme suggests for relevant borrowers in difficulty. But our duty is to serve our entire membership in a fair and appropriate way at a time when they need us, regardless of whether or not they qualify under a national scheme. In addition, opting out of the scheme allows us to continue operating independently of Government and taxpayers' assistance - as a well-run, risk-averse business, we are proud to champion our self-sufficiency."
"Ultimately our borrowers are comprehensively supported by the core values of the mutual model, and we believe that this justifies opting out of the HMSS"
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