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16 April 08 - BoE 'To Take Over Bank Mortgages'
Reports claim the Bank of England (BoE) is to bolster the
mortgage market following warnings that a raft of smaller
providers could close to new borrowers.
The BoE is working on a plan to ease the difficulties that
have hit the UK's mortgage sector by taking mortgage loans
off lender balance sheets, The Financial Times wrote.
It is thought lenders warned the Government that dozens
of small players could be forced to stop offering new mortgages,
leaving only large providers in the market.
Gordon Brown indicated in talks with bank bosses that he
is willing to intervene if banks continue to offer loans
to first-time buyers and those struggling to find mortgage
offers.
The BoE's plan would reportedly see it swap securities
backed by UK mortgages for Government bonds for a period
of one to three years.
But it is believed the bank will not take on any mortgages
that were agreed after the end of December last year as
it seeks to ensure it is not propping up the new lending
market or putting the taxpayer at risk.
News items supplied by SelectNews, produced by PA Business,
part of the group that owns The Press Association, the UK's
national news agency. Copyright (c) PA Business 2007.
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