A PIONEERING scheme to save mortgage defaulters from becoming homeless has been proposed.

Housing officers at Richmondshire District Council are asking members to support a mortgage rescue pilot scheme.

Residents falling behind on their mortgage repayments and at risk of losing their home would be able to sell the property to a housing association.

The association would then rent the property back to the householder.

Colin Dales, housing unit manager, said in a report to councillors: "The model will be designed to prevent potentially homeless households losing their home due to mortgage repossession, on condition that their potential homelessness is not deliberate.

"The households, assisted through mortgage rescue, will need to agree to receive debt advice prior to the purchase being agreed.

"A housing association will purchase the property using its own funds, a housing corporation grant and council contribution.

"The owner of the property will remain in situ while the purchase is in progress and, on completion, will become a tenant of the housing association.

"Thus, the householder will convert from owner-occupier to rent, but will be able to remain in their home without having to vacate and go through the homeless system before being placed in alternative accommodation."

Officers say the scheme will only be able to help households in certain circumstances where the outstanding debt is within a certain range.

They say the local authority's homeless service deals with between 15 and 20 cases per year, which are linked to mortgage arrears.

Nationally, home repossessions have increased significantly and are showing no sign of slowing down, they say.

Officers are proposing that money from the development of the Convent site, in Richmond, and the affordable housing reserve is used to fund the scheme.

The pilot would be an extension of the purchase and repair scheme.

This scheme, which officers say has proved difficult to deliver, sees the council work with housing associations to buy empty properties and rent them to nominated families.

The new scheme will be discussed at a council meeting in Swale House, Richmond, on Tuesday.