Home owners in negative equity will not be allowed to take advantage of the mortgage rescue plans from the government, reports The Times.

Those who have negative equity in their home will be barred from accessing a portion of the £200 billion fund provided by the government, even if they are in dire straits and desperate to raise money to ease their situation.

Customers with a high loan-to-value mortgage who are now in negative equity and desperate to remortgage will be bitterly disappointed at this news and face falling into arrears and the threat of repossession.

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