Darling acts to revive mortgage lending

Alistair Darling is ready to take action to help banks and building societies
secure more finance to facilitate fresh mortgages, after the mortgage-backed
securities market virtually dried up last year, cutting off what had become a
crucial source of mortgage lending.

The latest figures indicate house prices are continuing to tumble and home
buying activity has plummeted to the lowest levels for four decades, The

The chancellor is expected to order an extension of the
Bank of England‘s
emergency £50bn special liquidity scheme introduced this year to help ease
funding strains on banks caused by the credit crisis.

The scheme enables banks to swap mortgage-backed bonds issued before the end
of 2007 for much more tradeable Treasury bills which can then be used to raise
funds in the markets.

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