Released on: September 11, 2008, 10:35 pm

Press Release Author: Burgesses

Industry: Financial

Press Release Summary: Senior heads should roll at the Council of Mortgage Lenders
(CML) after failing to secure an equitable level of state protection for mortgage
lenders in both the private and rented sectors.

Press Release Body: Senior heads should roll at the Council of Mortgage Lenders
(CML) after failing to secure an equitable level of state protection for mortgage
lenders in both the private and rented sectors.

Sara-Ann Burgess, Managing Director of payment protection insurance specialist
Burgesses, said the CML had been ineffective at lobbying the Government to improve
the level of benefit offered to those unable to pay their mortgage because of
accident, sickness and unemployment. This does not compare favourably with the more
easily accessible and immediate level of protection offered to tenants who are
unable to pay their rent because of similar problems with accident, sickness or
unemployment.

The disparity between the help available to borrowers in the private sector and
tenants in the rental sector means there is a safeguard for landlords, which will in
turn help them to meet their mortgage commitments.

However this safeguard is not in place for borrowers in the residential sector
leaving mortgage lenders carrying the can should their customers be unable to afford
repayments.

“The CML has been ineffectual at getting the Government to make any movement on this
issue,” says Burgess. “Both residential mortgage borrowers and lenders will suffer
because of the lack of help available from the Government and the CML’s inability to
get the Government to change its stance may end up costing numerous members of the
CML very dear indeed.”

The Local Housing Allowance was introduced nationally on 7 April 2008 and is a new
way of working out Housing Benefit for private tenants. However while a lot of work
has gone into protecting those who are struggling to pay their landlord, nothing has
been done to change the rules surrounding the help afforded to borrowers in the
residential market.

Currently, not everyone is eligible for help and those who are have to wait 9 months
before the government will help with their mortgage. However, it will only pay the
interest on a maximum of £100,000 and at a fixed rate of Bank Base Rate plus 1.58%.
This is to change in April 2009 to 3 months and £175,000.

“This is an issue that the CML should have been pushing harder to resolve,” says
Burgess. “Mortgage payment protection insurance has not created the safety net that
the Government had hoped and the lack of state funded aid means residential mortgage
lenders will have to pick up the cost of defaults because of accident, sickness and
unemployment.”

Web Site: http://www.burgesses.com/news

Contact Details: Burgesses Limited
PO Box 6164
Braintree
Essex
CM77 7ZW
Sara-Ann Burgess
01371853027