Team in MIG plea to Chancellor
‘Why not bring the guarantees back to boost loans?’ asks open letter
THE Team Association is calling on Chancellor of the Exchequer Alistair Darling to introduce a Government-backed mortgage indemnity guarantee scheme.
Phil Irving, finance director of the Association and managing director of its Home Information Packs and conveyancing arm, has penned an open letter to Mr Darling pointing out that one of the biggest problems facing the housing market at the moment is “the chronic unwillingness of lenders to offer the kind of high loan-to-value mortgages that most first time buyers need”.
Mortgage indemnity guarantees used to be standard practice, point out Team, who have more than 300 member offices around the country.
But the MIGs fell out of favour during the last property recession, when the private-sector insurers underwriting them started to get cold feet as repossessions rose and claims went through the roof.
“With prices falling and repossessions rising, lenders have become acutely risk-averse — for the simple reason that they’re worried they may be left with a huge shortfall if borrowers default, and the properties concerned have to be force-sold,” said Mr Irving.
“A form of mortgage indemnity guarantee would solve that problem at a stroke, and help bring back the first time buyers that the market desperately needs.
“Team believes it could easily be reinstated — with Government help.
“In recent months, the Government has shown itself prepared to underwrite the banking sector to the tune of billions. The same commitment to lenders, through an MIG scheme where the Government acted as insurer of last resort, could utterly transform the prospects for the housing market.”
The letter to the Chancellor, a copy of which has also been sent to Housing Minister Margaret Beckett, is being backed up by a concerted campaign by Team agents throughout the country, issuing local press releases and lobbying their local MPs.