Rank; Really should become a politician
Posted - 23/03/2010 : 22:44:31
I was informed recently that on a call made to the TC helpline, the advisor asked the caller, some questions which where linked to Experian. They were given the option to refuse, but because the call was being made to HMRC, they felt uneasy refusing, Incase,HMRC thought they may have something to hide. Anyway, they agreed and were questioned on their mortgage. How did Tax Credits know they even had a mortgage, they asked me. I explained that it was the link with Experian giving this information. But I didn't know why the 2 were being linked until I read some news today from the House of Commons.
I would like to say this is GREAT news for anyone who is struggling to pay mortgage's, through loss of income, in the current climate. The Treasury Committee made proposals today, for the following changes.
I say this is Great News, but then I read further, only to also discover, that the committee have also said :
We recommend that the Government should review the Support for Mortgage Interest (SMI) scheme as part of the Pre-Budget Report this autumn, and consider the costs of linking the scheme to either: a contribution-based Jobseekers Allowance or to the tax credits system.
In my opinion, the link has already been made, unless someone can tell me different. Has anyone you know, had a similar call made to JSA, which has been linked to Experian? Or can someone from JSA/DWP clarify, if they are also collating information for Experian aswell, for this same purpose.
I personally would not like to decide between the 2, who should run this project. I don't have any trust at present that any of the departments could run the scheme efficiently.
What do you all think?????
The text below is just a short section of the evidence session minutes, to read in full, please click the link at bottom.
Treasury Committee holds mortgage arrears evidence session
93. The Mortgage Rescue Scheme has directly benefited just six households, despite being designed to assist upwards of 6,000 households. We call upon the Treasury and the Department of Communities and Local Government to explain why their projections for participation in the scheme appear to be so out of step with the picture on the ground and request analysis as to whether this reflects flaws in forecasting, poor design of the scheme or lack of consumer demand. We note the comments made by John Healey, Minister for Housing, that MRS has acted as a catalyst for people in mortgage difficulties receiving advice and assistance from lenders and money advisors. This is, of course, to be welcomed, although we do question whether it is the most cost-effective way to raise people's awareness of the need to, in the first instance, work together with their lender to resolve mortgage payment difficulties.
Support for mortgage interest
94. The principal Government scheme in existence prior to the current financial crisis was Income Support for Mortgage Interest (ISMI). This is a state benefit paid towards the mortgage interest payment, available to homeowners who are also in receipt of income support, Job Seekers Allowance or other income-related allowances. SMI is only available for loans taken out to purchase the property, or for specific home improvement. As such, borrowers who have taken out second loans for a purpose other than home improvements are not eligible to claim assistance.
95. On 5 January 2009, the Government announced reforms to SMI:
since 5 January 2009, homeowners will only have to wait 13 weeks, instead of 39 weeks, to be eligible for support. This is broadly in line with the three month limit by which time banks would consider mortgage payments to be seriously in arrears and as CML noted greatly enhanced lender's ability to show forbearance;
as a temporary measure, from 5 January 2009 the capital limit for loans on which ISMI is based was increased from £100,000 to £200,000.
These two reforms were worth £100m and were estimated to assist 10,000 claimants. This follows an earlier change announced in the 2008 Pre-Budget Report, where the Chancellor announced that the Government would "maintain the level of support at the current interest rate for the next months for existing claimants so that net support to such claimants is increased". 
96. The BSA told us that they welcomed the January 2009 changes to the ISMI regime, but expressed concern that the changes were not permanent and considered they did "not go far enough to make a significant difference to borrowers in financial difficulty". They advocated an overhaul to SMI, including an expansion of the criteria to make it available to all loans secured on the property and to be payable at a rate of interest due under the terms of the mortgage contract, not as a standard rate set by the Department for Work and Pensions. Citizens Advice also welcomed the decision to extend SMI support, but said it was "extremely concerned about the introduction of a two year maximum period of SMI support for jobseekers allowance claimants. It argued that:
the proper way to deal with claimant responsibilities and work incentives is through the requirement for people claiming JSA to ensure they are doing all they can to look for work, rather than through an arbitrary limit on housing costs. We believe that the two year limit on housing costs for JSA claimants should be removed immediately.
97. John Healey defended the two year cap, telling us that it was in place because the "purpose of the scheme was not to provide government support in perpetuity", but to help tide people through a temporary dip in their earnings.
98. As noted earlier, presently support for mortgage interest is paid on income-related benefits, principally income-related jobseekers allowance, but not on contributions-based jobseekers allowance, which most people with a National Insurance record will receive for their first six months of unemployment. Sue Edwards told us that she had come across examples of people having difficulty receiving SMI because they were on contributions-based jobseekers allowance and who as a result would not qualify for SMI. We raised this issue with John Healey who told us that the Government had no plans to change the eligibility criteria for SMI at the present moment, but promised the Government was "monitoring" the situation. In response to suggestions that one way forward would be to link eligibility for SMI to tax credits rather than income-related allowances, Mr Healey defended the present arrangements and cautioned against building too much complexity into the system.
99. We recommend that the Government should review the Support for Mortgage Interest (SMI) scheme as part of the Pre-Budget Report this autumn, and consider the costs of linking the scheme to either: a contribution-based Jobseekers Allowance or to the tax credits system. As part of that review the Government should examine: the payment of actual interest rates instead of the SMI standard interest rate, the issues surrounding second charge mortgages and what steps would be needed to lift the two year cap on SMI payments.
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