URGENT Changes to Morgage Interest Support [merged]

TOBRUK

Lee123 wrote: »

I too have had my S M I halved! As my mortgage is set at 6%. If it wasn't for my father I would lose my home, now I can't afford the payments, I could barely before! I am a single parent (my children's father has died) we where divorced. But my father has said that he could invest some money in my house and bring the morgagage down. Do you think the jsa would allow this?

Thanks for any advice

Hi Lee123, I take it you receiving benefits and do not work at the moment. I am waiting for THAT letter to come through the post to see where I stand (although I have a pretty good idea of what my shortfall will be!) and it is going to be so difficult.

You say if it wasn't for your father you would lose your home - if he is helping with any payment be very careful what you say to the department as they may look upon this as income!

Although your father is prepared to pay off some of the mortgage (is he thinking of paying a lumpsum?) to bring it down I don't think they will allow this to be honest - I believe it would be under special circumstances. I went to CAB a few months ago and they have a specialist in this field they contacted on my behalf. My situation is that I am ill and disabled, I presently live on my own in a house -I need to move to a bungalow but also need to move 100 miles to be near family for care needs. The probem I have is that the area I need to move to is more expensive and if I sell this house to move I may be a few thousand pounds short!

My family wants to pay the difference if I am unable to meet the price for moving. I have been told (I have a long explanation in writing) that in my circumstances I have a strong case (as it's on health grounds AND my GP is supporting it) that they would allow my family to make a direct payment BUT I may also have to fight it and wouldn't be able to put this to them until I have moved!!

With something so complex as this I would not phone them up - write them a letter explaining your situation and ask if it would be allowed for your father to make a direct payment to your mortgage lender, and explain that otherwise you will lose your home etc etc. Perhaps you could speak to CAB first to see if they can look into it for you as I did.

killearn

devastated22 wrote: »

Just over 2 yrs ago my husband collapsed at work with a Brain Haemorrage. It was a miracle he survived it but it has left him with so many disabilities, Epilepsy, Brain Damage loss of communication etc etc that he can never work again. He has always been hardworking and was 57 when this tragedy struck. He is now 59 i am 62 . I gave up my job to become his full time carer. As I receive my pension I could not claim carers allowance. I was advised to apply for pension credit which after a lot of stress i finally received. I get 10p a week Pension credit but what it did mean I could get help with our morgage interest. I was just keeping our heads above water until Saturday when the letter arrived telling me they have halved my interest help. I now do not know where to turn. Our Morgage is on a fixed rate at 6.4% so I now have to try and find another £130 a month immediately.
I do understand how some people feel why should their taxes go to help tpeople like us but also we have paid our taxes and National insurances for over 45 years!! We would never begrudge people who are hit by circumstances beyond their control help and now in our hour of need we had to fight for this help, now it is being taken away with no notice.
We both grew up in poor familys, in council houses seeing our parents struggling but we both decided when we got married we wanted to buy our own home. We both did two jobs to save our deposit. Now we just have our home where we felt we would live till we die without bothering anyone but this terrible thing happened.
I do not feel like I am getting handouts as we are portrayed in the media and by politicians as we have paid all our taxes but feel we have now been so let down in our time of need. I cannot get a job as my husbands needs someone here all the time. I have Crossroads come one afternoon for 4 hours to enable me to take my elderly father out but now that is being cut to just 4 hours a week so life is pretty miserable.
So before people condemn others for needing help with morgage interest help etc they should sit back and think one day it could be you that tragedy strikes without warning and what if all this help is taken away.Everyone has a different story.
Sorry if this is a rant but i feel desolate and alone. I cannot discuss this with my husband due to his Brain Damage and would not want to worry our son who has his own family to care for.I just don't know how we are going to be able to stay in our home now, which really is my sanctury as we cannot do things that other people take for granted anymore.

I read every day how the newspapers are branding anyone that is claiming is a sponger.

Maybe they should read a real story like this one above.

We need a swing in the press and a story like many on here should do that, but we are all worried about twist, but really could any reporter or news channel make these stories sound of spongers...?

I don't think so, someone just needs to shout louder in the right ears.

I have been following this all very closely myself as I am to affected.

My first step is with my MP, after all this rule change was placed before him in parliament July 2010.


I have also lodged an appeal DWP ( for what it maybe worth)

I was told i could not, but why send me the appeal booklet on how to if i can not.


This interesting part of all this is the latest Response by the Council of Mortgage Lenders to the Department for Work and Pensions Consultation Paper 1st Oct 2010.....(see below)

This needs to be part of this reform taking place and the correct help will be put in place then for real cases.....(this we need to shout about)


How it all started....
Emergency Budget 22 June 2010 Measures to support those most in need

More resources will be targeted at those most in need of help with their housing costs. These include:

Increasing by £40 million the budget for Discretionary Housing Payments, which deal with hardship cases

•From October 2010, the standard interest rate used to calculate Support for Mortgage Interest payments will be set at a level equal to the Bank of England’s published monthly Average Mortgage Rate. The standard interest rate can be found in the first tab of Table G.1.4 under the heading “CFM”, column “HSDE” on the Bank of England website). The initial starting rate will be the rate published in August 2010 and will only change when the Bank of England publishes an average rate that differs from the standard rate by 0.5% or more. For more information see SI 2010/1811.

In its Equality Impact Assessment on the change the DWP estimates -

“By setting the standard interest rate at the Bank of England published average mortgage rate (3.67% in April 2010), we estimate that just over half of all support for mortgage interest customers (around 115,000 people) will continue to have their eligible mortgage interest outgoings fully met by their benefit awards. Most customers receiving a shortfall under this arrangement (around 110,000 people) would still have the lion’s share of their eligible housing costs met by support for mortgage interest, creating only a relatively small level of arrears, and based on conversations with the Council of Mortgage Lenders we would expect lenders to demonstrate forbearance in the vast majority of these cases”

On the 1st Oct 2010 the Council of Mortgage Lenders say.....

1st Oct 2010 21st Century Welfare
Response by the Council of Mortgage Lenders
to the Department for Work and Pensions Consultation Paper

Support for homeowners
22.
As part of its wider welfare reforms, we would recommend that government gives further consideration to paying SMI at the actual rate being paid by the borrower, rather than at an arbitrary level. Our concern is that borrowers who benefit most from SMI, i.e. those on the highest rates of interest and who are also the most vulnerable (impaired credit and debt consolidation).

My case.....

After myself having to go to appeal to receive SMI (Case is on file last year) and being at the door of re possession at the time I find that information that is based on just conversations with the Council of Mortgage Lenders a very poor way of dealing with lives, beit only around 110,000 people or is that families I ask?

My benefit of help has dropped by £47.12 pw shortfall that brings our disposable income down by that amount now, but this is not or has not been taken into account of our joint claim.

Before the change of SMI reduction we as a couple with one person working we were stated as being living £10pw above the stated couple allowance taking my partners income into account.

This week we lose in claim £47.12 pw shortfall from the 25th September 2010 not as stated on the direct Gov website “From 1 October 2010 the standard interest rate will be set at a level equal to the Bank of England’s published monthly average mortgage interest rate.”

The starting rate that will apply from 1 October 2010 will be 3.63 per cent (the rate published by the Bank of England on 31 August 2010).

I fully understand law cannot be changed on this matter, but looking at our cost of living or lack of, should also be assessed now.

I predict with this massive drop in help that not many Mortgage companies would accept such a reduction each month and will act for possession, this prediction is based not on just conversations with mortgage companies but knowing myself that lesser payments each month because my Lion share is not as big as expected or predicted will finally end in court.

I found that when forbearance is demonstrating it is only for a very short time, with many looking at 6 months as a maximum and some only 3 months.

Going to the point of prediction of a Lions share, now correct me if I am wrong I am no lion but share I do understand.

I am going to break this down, a Lion will be greedy at the feeding table I would imagine being the beast that he is, and his share would be quite large or take it upon yourself to tell him otherwise as that could result in you also being part of his lunch or giving him an even bigger share.

Lions share = all, or nearly all; the best or largest part; - from

The lion's share is an expression that has come to mean the larger of two amounts, or more often, the largest of several amounts. The saying derives from one of Aesop's fables of which there are several versions, but is also found in the ancient Indian Jataka tales and in Rumi's Mathnavi.

Now I am hoping that I have entertained with my findings of dealings and sayings, but let us look at the real case.

Our joint help of benefit has dropped by £47.12.pw shortfall, we are One of the 110,000 that was suggested having the lions share of help, while in this time of trying to find employment between last week and this week.

We never had £47.12.pw out of our £130.pw at our disposal last week, so how can we have it this week? If we had have we would have been receiving less help then surely.

I spent most of last year trying to fight to save my home from repossession and I don’t want to have to do it again.

This award is unfair and in common sense and I am hoping that the tribunal can see that and make order that our stated disposable income of £130pw is reduced, this will allowing more benefit of help where it is due.

This does not affect Law or the now set rate of SMI paid to us, this will affect our stated couple allowance with a decreased of disposable income resulting in real help again.

I am not here to change the law; I am here to make sure it is fair.

Estimates predictions and conversations are not really the answers to real problems that arise, did any conversation take place to find out about the 110,000 that suffer this shortfall besides the thinking or the prediction that their share was enough, and if not the mortgage company will accept lesser payments with hope and with the outcome after the Forbearance period.

How Do Mortgage Payments And Forbearance Work?

431551

A mortgage payment forbearance is an agreement made between a delinquent mortgage holder and their lender concerning the future payments of outstanding mortgage debts. In the agreement, the lender will agree to forgo taking foreclosure actions upon a given borrower for a temporary time period, while also offering homeowner’s the chance to forgo making full or any payments on their current mortgage for a set timeframe, usually no more than three to six months. In turn, the homeowner will have to repay any unpaid sum, and in the interim, the homeowner must take concrete action to meet future payment obligations.

Mortgage Payments before Forbearance Periods

Before forbearance occurs, homeowners are either delinquent in payments on a mortgage or face delinquency. However, to obtain lender approval for forbearance, most lenders will require homeowners to provide information in the form of a hardship letter. The letter, in cases involving hardship requests relating to forbearance, will demonstrate to a lender that a given homeowner’s inability to pay is the result of a viable hardship. In turn, the homeowner will seek to demonstrate their current inability pay mortgage debts are related solely to a given hardship, which is only temporary in nature. In order to approve forbearance, lenders typically look to see if forbearance will actually help homeowners make future payments after the forbearance period is over.

Mortgage Payments during Forbearance Periods

Depending on the case-specific terms of a given forbearance agreement, homeowners will be required to do the following for their mortgage payments during forbearance:

Make partial or no payment on their existing mortgage agreement, which will vary depending on the pre-arranged agreement with their lender

Continue with the nonpayment or partial payment terms of the forbearance agreement only for the specified timeframe pre-arranged with their lender, which typically runs anywhere from three to six months

Make arrangements to pay future mortgage payments in the months following forbearance

Mortgage Payments after Forbearance Periods

The longest lasting effect forbearance has on a mortgage comes following the forbearance period itself. While each forbearance agreement between a lender and borrower will vary, the following lists some of the common effects forbearance has on mortgage payments after the reprieve period ends, including:

Unpaid sums during forbearance are built back into a loan. The method that your lender uses for your specific forbearance will vary, and in turn, homeowners should be wary of any adjustments to their mortgage payments, including how future payments will be built back into a mortgage

The forbearance may also make other adjustments and modifications to a mortgage on a case by case basis. Homeowners should be aware of these adjustments before agreeing to any forbearance

The forbearance will most likely cause an increase in monthly payments following the temporary reprieve approved by lenders. Homeowners should find out ahead of time how much their monthly payments will increase and how long to expect these increases

Homeowners should also consider the effects a forbearance may have on their credit report and ability to gain other foreclosure prevention relief from their lender in the future

Forbearance in the USA is called.

Behind on Mortgage: How to Buy Some Time. http://www.foreclosurelawfirms.com

Ref Documents:

S T A T U T O R Y I N S T R U M E N T S 2010 No. 1811 SOCIAL SECURITY

The Social Security (Housing Costs) (Standard Interest Rate) Amendment Regulations 2010

Made - - - - 14th July 2010 Laid before Parliament 20th July 2010

Equality Impact Assessment Support for Mortgage Interest DWP April 2010

1st Oct 2010 21st Century Welfare Response by the Council of Mortgage Lenders to the Department for Work and Pensions Consultation Paper.

Broken_hearted

The award has been judged fair based on the rate the banks gave them . The chances of it been overturned are slim to none, people need to be realistic homes have to be sold. Being almost at the end end of my mortgage I should be able to cling on.
Deeper cuts are coming, people who are struggling now will be tipped over the edge, MPs dont care they have jobs and security.

killearn

I wonder if in MPs expenses as they also claim for their mortgages

If this change has also taken place?

That would just add the cherry on the cake if not....

Tara100

Broken_hearted wrote: »

The award has been judged fair based on the rate the banks gave them . The chances of it been overturned are slim to none, people need to be realistic homes have to be sold. Being almost at the end end of my mortgage I should be able to cling on.
Deeper cuts are coming, people who are struggling now will be tipped over the edge, MPs dont care they have jobs and security.

Agreed - I don't think for a minute that the decision will be reversed. The country is in bad way, and the governmental purse strings have got to be pulled in tightly to save us from sinking further.

I've lost sleep and seriously worried about this matter, but then I have also remembered how lucky we are to have the UK benefits system - many other countries, even those in the EU offer very little in the way of similar financial support.

Dognobs

Long time viewer first time poster! I just want to put my story across I now need to find £692.79 a month! Lost my job May 09 but have some savings. We re-mortgaged Sept 08 just as the credit crunch hit and we had a choice of only 6 mortgages from our broker this was over 200 before!. Thought I world be smart and get fixed rate for 3 years as I remember 15% interest rates and the best about was about 7.9%!! And that’s it until next year when my rate drops to 2% above base rate!
I am with GE Money and out of the blue they phoned me this morning and asked if I was aware of the change and told me how much I now have to find each month they have put together 5 options to help people so looks like the mortgage companies have woken up. I do hope the government review this soon as we are living off limited savings now I am lucky as I have no other debts but this is a massive problem. That people are unaware. It baffles me why the government will pay £500 a week to a landlord but won’t help me and my children stay in their home! I only bought it because the council refused to replace the windows, kitchen, heating and sort the damp problem so I did it myself!
Job prospects are looking up!

MissMoneypenny

Dognobs wrote: »

I am with GE Money
Thought I world be smart and get fixed rate for 3 years as I remember 15% interest rates and the best about was about 7.9%!!

GE Money is a sub prime lender for those with poor credit records, so their rates will always be higher than a normal lender.

Dognobs wrote: »

It baffles me why the government will pay £500 a week to a landlord

They won't be paying £500 per week to a landlord. The government decide how much they will pay depending on the number of bedrooms they say you need.
In most cases, one bedroom is allocated for:

• every adult couple,
• every other adult aged 16 or over,
• any two children under 10,
• any two children of the same sex,
• any other child
• single and under 25 gets the shared house rate.

But all these rents (LHA benefits) are dropping in April too, from the 50th percentile that the government pay now, to the 30th percentile. LHA rates will be frozen for 2 years and then only allowed to rise at the lowest rate possible, CPI.

Plus they are bringing in a cap so the maximum LHA they are going to pay for any family, regardless of the number of children of where they live, is £400pw. Plus the maximum benefits they are going to pay for any family is going to be £500pw and that includes rent, council tax, tax credits, child benefit, JSA or IS and whatever else the parents are claiming.

killearn

Dognobs wrote: »

Long time viewer first time poster! I just want to put my story across I now need to find £692.79 a month! Lost my job May 09 but have some savings. We re-mortgaged Sept 08 just as the credit crunch hit and we had a choice of only 6 mortgages from our broker this was over 200 before!. Thought I world be smart and get fixed rate for 3 years as I remember 15% interest rates and the best about was about 7.9%!! And that’s it until next year when my rate drops to 2% above base rate!
I am with GE Money and out of the blue they phoned me this morning and asked if I was aware of the change and told me how much I now have to find each month they have put together 5 options to help people so looks like the mortgage companies have woken up. I do hope the government review this soon as we are living off limited savings now I am lucky as I have no other debts but this is a massive problem. That people are unaware. It baffles me why the government will pay £500 a week to a landlord but won’t help me and my children stay in their home! I only bought it because the council refused to replace the windows, kitchen, heating and sort the damp problem so I did it myself!
Job prospects are looking up!

Could you tell me what the 5 options to help people are please ?
Regards

Dognobs

killearn wrote: »

Could you tell me what the 5 options to help people are please ?
Regards

Not sure as I am not in that state (YET!) Best to phone them.

GE Money is a sub prime lender for those with poor credit records, so their rates will always be higher than a normal lender.

I understand that however the reason was I had to self cert due to the fact I worked two jobs and one was self employed and we don't have a good credit rating due to the fact I HAVE NEVER USED CREDIT!!. Also paying the bill was never a problem when I was working.

The rent issue was miss understood I just find it hard that if I moved out of my house and sold it then rented they would pay £1000 for me and my family for rent but only pay a small amount of the intrest on a family home.

dave030445

Plus the maximum benefits they are going to pay for any family is going to be £500pw and that includes rent, council tax, tax credits, child benefit, JSA or IS and whatever else the parents are claiming.[/QUOTE]



That not the case if you are disabled.