Throughout April, Treasury officials have been holding urgent high level talks with top banking sector officials along with housebuilding industry representatives to find a path through the credit squeeze and to avoid a full-blown housing market recession. The Council of Mortgage Lenders has welcomed the Bank of England’s £50 billion injection into the banking sector – a dramatic bid to ease the liquidity crisis. The plan, drawn up jointly with government, is based on a “bond-swap” programme, by which the Bank will accept asset-backed securities – primarily AA-rated mortgage debts – in return for gilt bonds, which it is hoped that banks will then use to increase the flow of interbank lending. In return for the package, government is desperately hoping for banks to pass on rate cuts to borrowers and look to repossessions only as a “last resort.” <br><br>Chancellor Alistair Darling told lenders: “We are prepared to play our part to un-freeze the current situation. In turn, what we are saying to banks is you have got to help people as well. “If you can pass on those interest rate reductions, if you can help home owners, help businesses, that will help us all get through a very difficult …