The funding will go to debt advice agencies, as well as 80 court desks across the country.
The Government says 6,000 cases have been seen by the court desks over the past year, and more than 100,000 households have benefited from free advice on managing their debts from charities and councils.
Services offering free advice and representation in court have helped stop repossession in four out of five cases making use of their service.
The decision comes as pressures on repossessions are forecast to continue throughout 2010.
The funding is part of a range of Government support, including help with mortgage interest payments and schemes for the most vulnerable households.
FSA figures published today show there were 13,987 repossessions between July and September – 5 per cent less than at the beginning of the year.
The Government’s “It’s Your Home ” campaign has been running nationally and in 56 repossession hotspots across the country, pointing people to free, impartial advice either online at www.direct.gov.uk/mortgagehelp, or from the National Debtline on 0808 808 4000.
The Government says the £20m Preventing Repossessions Fund, given to councils in June, has so far helped more than 420 homeowners.
Healey says: “With the risk of repossession set to remain high throughout next year, I want to ensure we are doing everything possible to help.
“The people who work in debt advice agencies are, in many respects, the unsung heroes of our campaign to help people avoid repossession. Whether over the phone, face to face or in court desks across the country, the service they provide is a vital lifeline for those who feel that repossession is just around the corner. So I’m extending this free help into next year with £4m additional Government funding.”
“And to ensure lenders follow the tough rules put in place, a new checklist was introduced earlier this year so lenders must prove they have exhausted every possible option before seeking court action.”
“But I also remain concerned that a disproportionate number of repossession cases come from specialist lenders. That is why it’s vital that the FSA’s tougher regulations for lenders are introduced as quickly as possible – to ensure all borrowers are treated with the same tolerance and understanding, regardless of who their lender is. These measures combined will ensure that in all cases, repossession remains the last resort.”