AMI warns of 'dire consequences' for repossessions

The Association of Mortgage Intermediaries (AMI) has written to Liberal Democrat Shadow Chancellor Vince Cable ahead of tomorrow's parliamentary debate on repossessions, warning of dire consequences if effective measures are not implemented immediately.

In its briefing note, the trade body emphasised its support for Government measures aimed at addressing the increasing difficulties borrowers find themselves in, but expressed concern that it is taking too long to see real results on arrears and repossessions.

Chris Cummings, director general of AMI, said the Council of Mortgage Lenders' prediction that repossessions will hit 75,000 this year - the highest figure since 1991 - is based on the Government measures actually working.

He added: "The outlook could be even more dire if effective measures for the mortgage market are not implemented immediately."

Also included in the briefing note is AMI's support for Sir James Crosby's recommendations for temporary guaranteed securitisation.

"AAA mortgage-backed securities are still relatively safe and could actually be profitable for the Government, but the cost of funding these instruments would be attractive to all banks so there would be no stigma in using them," Cummings concluded.