Financial Times FT.com

Call for longer guarantees on loan holidays

By Jane Croft and Alex Barker

Published: January 31 2009 03:44 | Last updated: January 31 2009 03:44

Banks are pressing for extended government guarantees on state-backed payment holidays aimed at struggling homeowners – which could leave taxpayers exposed for up to 10 years.

The Council of Mortgage Lenders is suggesting that a government guarantee that would see the state pick up any losses if borrowers were repossessed should be in place for five to 10 years to minimise risks to the lender – instead of a previously suggested two-year period.

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