Thursday, December 15, 2011
Portable Negative Equity
Banks are to be told to rescue â€˜mortgage prisonersâ€™ by loosening lending restrictions to allow loans worth more than 100 per cent of a property's value for those trapped in negative equity. Because of falls in the value of their home, hundreds of thousands of hard-working people are unable to move to a new home. Businesses are struggling to recruit managers from other regions and the housing market is stagnant. But new mortgage application rules â€“ to be announced next week by the Financial Services Authority â€“ will give banks the green light to approve loans to trapped homeowners. This will apply to those whose loans amount to a very high proportion of their homeâ€™s value â€“ and even those in negative equity.