A PLEA to bankers urging them to give “fair mortgage offers” to crofters has sparked a review by the Royal Bank of Scotland over its decision to reject two mortgage applications.
The original decision to refuse the crofters’ applications was made because they had received Croft House Grant funding from the Scottish Government.
Currently, those in receipt of the grant have been unable to secure an RBS mortgage because the bank fears that if the applicants become insolvent, the Scottish Government’s rights to recover monies under the scheme would rank ahead of the bank’s right to recover the home loan.
The saga came to light after crofters on the Isle of Skye raised the matter with constituency MSP Kate Forbes who wrote to Fergus Ewing, the Cabinet Secretary for the Rural Economy and Connectivity raising these concerns.
Mr Ewing pledged his support and wrote to RBS urging them to give fair mortgage offers to crofters.
In his response and letter to RBS, Fergus Ewing MSP noted that “a misperception” had been created because the government’s rights are held against persons, whereas the bank’s are held against the property. Mr Ewing added that he hoped his letter “offers the necessary assurance” to RBS.
Kate Forbes MSP said: “I am delighted that Fergus Ewing’s letter to RBS regarding the lack of mortgage support to crofters in receipt of funding for the Croft House Grant scheme has prompted RBS to reconsider its actions.
“The Croft House Grant scheme is a fantastic initiative for the Highlands and Islands because it supports the need for housing and it helps crofters who would not have the funds to rebuild or improve their home.
“I would like to see the banks supporting farmers and crofters far more than they do currently, and hopefully Fergus Ewing’s intervention will do that.”