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Pressure is likely to mount on mortgage holders to buy mortgage payment
protection insurance cover, as leaked details of talks between debt charities
and mortgage lenders lead to increased speculation of an additional burden on
homeowners.
Media speculation that record levels of missed mortgage repayments and the
worrying debt mountain shouldered by UK homeowners will prompt the introduction
of compulsory MPPI could give High Street banks a major payday, said
Chief executive of Moneynet, Richard Brown, explained: “Making this insurance
compulsory would effectively mean substantial additional monthly costs would be
passed on to homeowners, even if the Treasury demand that lenders and mortgage
companies provide the cover as a bolt on to protect borrowers against falling
into deep debt should they lose their jobs or be unable to work.”
At present barely a quarter of homeowners have an PPI policy in place on their
mortgage, and currently have to wait for nine months before qualifying for any
State help with the mortgage by way of Income Support Mortgage Interest
payments.
“Even then, they are only given assistance towards the interest on their
repayments, so for many people it makes sense to arrange cover,” said Brown.
Browm added: “If lenders are forced to foot the bill they will simply factor in
the cost of the insurance by way of higher mortgage repayments.
"Ultimately, it is the homeowners who will lose out in order that the Government
can boost its coffers through saving on paying out mortgage benefits.”
Source:
Getting Paid
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