1. MATRICS would like to thank both the Scottish Government and the Accountant in Bankruptcy for their continued support and funding

2. Introduction Two schemes operated by the Scottish Government help owners who are experiencing difficulties in paying their loans secured against their property: The Mortgage to Rent Scheme The Mortgage to Shared Equity Scheme

3. Objectives Review of entry requirements Application Process – How it works Application Process – Tips on completing the application Application Process – Working with the creditors

4. Statistics 2009/10 there were 303 successful mortgage to rent applications. No mortgage to shared equity applications were agreed From 1 st April 2010 to 31 st August 2010 there were 113 successful mortgage to rent applications Three mortgage to shared equity applications were agreed.

5. Entry Requirements Client has failed to reach agreement with lender on how to manage arrears or have had a trustee appointed to their estate who is forcing sale of property Value of home must be no more than the maximum levels Client must have been unable to make full payments on secured loan/mortgage for at least 3 months and have accumulated arrears of at least one month The client ineligible for other UK government support schemes or their property is still under threat of repossession (e.g. support for mortgage interest)

6. Entry requirements Client must not normally own a home elsewhere Client must have lived in their home for the last 12 months They must not hold capital in excess of £2k if they are under 60 and £4k if they are over 60 Additionally for mortgage to shared equity: Hold 25% or more equity in your home Not have trustee appointed Have a capital and interest mortgage Own a property which is above the Tolerable Standard

7. Application Process Before an application can be considered owners must receive independent advice regarding their overall financial situation from a CAB, Money Advice outlet or local authority money advice centre. (www.scotland.gov.uk) Applications must be completed in full and contain all supporting documentation

8. Application Process On receipt of application Scottish Government will: Carry out initial assessment Do a search against the property Do a desk based valuation If the application is eligible they will instruct a Scheme 2 valuation (which will also identify cost of repairs) Obtain redemption statements from all lenders with loans secured against the property THIS PROCESS TAKES APPROX 5 WEEKS

9. Application Process If the open market valuation meets the eligibility criterion, the Scottish Government calculates the level of equity the owner has in the property and whether they will be considered for the MTR or the MTSE scheme.

10. Application Process Clients choice – Mortgage to Shared Equity Clients choice – Mortgage to Rent

11. Tips on completion Check that your client meets the criteria for the scheme they would like to apply for Ensure all sections of the application are completed Documentary Evidence (page 26, section 35) Advisers Letter (www.wiseradviser.org)www.wiseradviser.org CHECK APPLICATION

12. Working with the creditors Advise secured lender early in process that client applying for mortgage to rent/mortgage to shared equity Shortfalls – MAT/BBA Common Financial Statement Negotiation Lender Contacts – CML, FLA (www.wiseradviser.org)www.wiseradviser.org

13. Further Help & Support MATRICS Money Advice Consultancy Service: T: 0845 123 2326 E: consultancy@matrics.org.ukconsultancy@matrics.org.uk