The scheme was brought in by Parliament to help those homeowners at risk of repossession by bringing in a housing association to buy either the whole or part of the property or provide loans to keep them in their homes.
The GLA had recently brought forward the end date of the scheme from March next year to 31 December but decided to axe it last week without any further warning.
Blogging for the Guardian, Ben Reeve-Lewis, director of Easy Law Training and a private rented sector enforcement co-ordinator for a London authority, said the scheme had “failed” to reach many people.
He said: “Many prospective applicants backed up in the system will now lose their homes and it will be more difficult to buy time for them in court. If you were one of the lucky ones who benefited from the scheme then I'm sure you will champion it but it failed to reach large numbers of people.”
The GLA informed local authorities by letter that it would not be taking on any further cases and said the scheme was being scrapped because it offered “limited value for money in London”.
Reeve-Lewis said one of the most useful aspects of the Mortgage Rescue Scheme was that it allowed case workers to request adjournments and suspensions to repossession action in court so the local authority could decide whether the person set to be evicted could qualify for the scheme.
During the time given to investigate a claim Reeve-Lewis said it was common to discover a range of breaches of protocol by lenders which are supposed to use repossession as a last resort but in practice do not follow the processes correctly.
As a result, he added, most mortgage repossession claims are defeated by astute advisers pointing out the numerous alternatives to repossession that lenders could offer but routinely fail to do so.
Speaking of the decision to axe the scheme he said: “Whether this was the result of the mind-bogglingly restrictive referral procedures that excluded more than it helped or if it was down to housing case workers not referring cases on because they discovered alternatives to repossession is a matter for history now.”
