Over this past year, the British government announced a scheme to simply help families facing foreclosure reduce payments as a result of loss of income. The scheme has gone into effect, helped very few families, and cost taxpayers an incredible number of pounds.
Homeowner Mortgage Support Scheme
The Homeowner Mortgage Support Scheme, or HMS, was announced over this past year with much fanfare from the government. HMS was supposed to simply help struggling borrowers stay PM Modi Yojana in their homes as the economy and unemployment rates were at the worst levels in years. The scheme allows homeowners to lessen their mortgage payments for approximately 2 years because of loss of income. The scheme has only managed to simply help 15 families but has still cost 2.5 million pounds. With the typical home cost being $165,000, the us government may have saved money just by purchasing the homes outright for the families.
Where are the Struggling Families?
HMS is just one government program meant to simply help struggling homeowners. Other programs have helped families get equity loans to lessen their mortgages or to offer their homes and stay in them as tenants. Even though 1 in 1000 households is at risk of repossession, very few have needed the sort of help provided by HMS because other programmes are better suited to their needs. HMS is not as helpful as expected.
Where Did All the Money Go?
Even although government has spent 2.5 million pounds to simply help only 15 families, they still defend the program. Much of the amount of money spent was said to own gone to one-time set-up costs and won’t have to be spent again this year. Money was also used on broader policies and development. Currently, there are still tens of thousands of homeowners at risk of repossession that can take advantage of HMS and the us government believes that the safety net is likely to be needed by more families next year.
May be the Scheme Working?
Even though a few of the money spent on HMS was one-time costs of development and policy work, the program may not necessarily be effective. At the current per-family rate, HMS has spent more money helping 15 families reduce mortgage payments for 2 years then your 15 homes cost. Possibly the development of the program was faulted from the start, with initial costs being too high. Continuing the program seems like it will 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 is likely to be reduced to an acceptable level that really makes sense. It is also a surprise that when other programmes are utilized more regularly, why this programme is continuing as there are no doubt ongoing costs related to the scheme.