First few people in city now qualify for mortgage rescue aid

THE first handful of people in Derby have met the strict criteria for the Government's £200m Mortgage Rescue Scheme.

Yet, despite the criteria being met in 12 cases and the scheme being in place for six months, no one in Derby has yet received cash or help from it.

A total of 53 inquiries from city residents have been made to the scheme, set up in January to help the most vulnerable homeowners fight repossession.

Of those 41 did not meet the eligibility criteria and 12 did.

Out of the 12 that did, five bids are in the pipeline to see if the applicants will get help and the other seven were withdrawn because the applicants found help elsewhere.

To access the scheme, a homeowner must be pregnant, a parent or guardian or vulnerable because they are elderly, disabled or have mental health problems.

Originally, for the scheme in Derby, the applicant's property must be worth less than £135,000, but in April that changed to £155,000.

When introduced, the scheme set out that the applicant could not be in negative equity – when the value of their house has dropped to a lower amount than the outstanding balance on their mortgage.

Now, however, that has changed so people are allowed to be in negative equity up to 120%.

Councillor Bob Troup, cabinet member for housing and public protection, said that the criteria for the national scheme was relaxed slightly in April, which may have helped more people become eligible.

He said: "Changing things like the negative equity up to 120% may have helped more people apply for this but the scheme was intended to catch the most vulnerable people."

Under the scheme, homeowners can get a loan from a registered social landlord which helps them cover mortgage payments.

Alternatively, the social landlord, a housing association for example, can pay off a homeowner's mortgage, leaving the resident to pay rent to the landlord at a level they can afford.

The scheme was announced in November last year and was introduced in Derby on January 15, as official figures showed an increasing number of families facing repossession.

Councillor Ranjit Banwait, Labour's shadow cabinet member for housing, said while it was an upsetting time for those facing repossession he was glad the scheme was working to help those in need.

"I think the number of applications has a lot to do with the work the council has done to let people know about this scheme which I pushed for," he said.

"This scheme set out to help the most vulnerable and it is good to see that there are people eligible for this help who are applying and hope that will continue."