In a response issued to the Government, the Association welcomed the scheme's introduction. However, it cautioned that although it will represent an important new weapon in the fight against repossession, it remains concerned that it will not help as many borrowers as the Government expects.
In the response, the BSA says that the Government's key message must be to advise borrowers to contact their lender at the earliest sign of repayment difficulty.
Commenting on the proposals, Paul Broadhead, Head of Mortgage Policy at the BSA said: "For building societies, taking possession of a property really is the last resort. They maintain good relationships with their customers to ensure that they can develop individual solutions to arrears problems, and this scheme could represent an important new tool for them."
"As such, we look forward to continuing to work with the Government as the scheme is developed further to ensure that it adds value over existing practices and that the most vulnerable borrowers in need of help are able to receive it."
"It is vital that government understands that lenders have to hold increased capital for accounts in arrears, and if not considered fully, this scheme could have the unintended consequences of further stifling new mortgage lending."
"However, it remains the case that as soon as borrowers believe they may have a problem, the most important thing is that they should contact their lender as soon as possible to allow the best solution for them to be determined."
