Dave Beans

Io Mortgates "a Ticking Timebomb" For Those In Their 50S

56 posts in this topic

I must admit, I felt a little sorry for you. In fact, you were the towering genius and I was the one needing 'dimbo' sympathy. :D

Jolly good, sir.

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a new issued mortgage to cover the old one is another new buyer who cant get funds.

The problem lies in the new FSA rules about mortgages ending @75.

And lets not forget, people have IO at all because a repayment is too expensive, and is often a last resort when a repayment mortgage becomes unpayable through circumstances.

and I read elsewhere 40% of all mortgages are IO.

That's why this, the IO timebomb, is hopefully where it ends, (provided the regulators are allowed, by the elected politicians, to hold the line here).

The bonkers bubble in Japan was made possible by turning 25 year mortgages into 100 year mortgages. It's the last trick in the box, after you've shifted LTV from plausible to 125%, and caved on the requirement for repayment, (i.e. moved to an IO "paradigm"). Only here in the UK could we even be comtemplating rolling forward IO mortgages. That idea deserves its own thread! But even that isn't as bad as the Japanese idea of passing on your mortgage debt to your offspring, and even that bubble crashed!

At some point the political calculus for the government, (whoever they are at the time), will shift from "We're not having a crash on my watch" to "Let's have this crash properly now, and perhaps things will turn around before I'm up for election".

10 million mortgages, 45 million voters - you do the maths.

What's the alternative? If you keep inflating an asset bubble indefinitely by printing, then fiat money becomes meaningless as a means of exchange. The economy becomes a purely a "black ecomony" in the mode of Weimar Germany.

Democracy under the rule of law has proved quite robust, and the fact that we've all been able to share these heretical opinions without having our door kicked in the Stazi is credit to that. All this will pass. And if you have your door kicked in by the Stazi, and live to tell the tale, then go long housing.

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Last night, the Council of Mortgage Lenders said: ‘Lenders are attuned to this issue and will treat borrowers sympathetically.’

Which means:

"I'm terribly sorry we won't be giving you a loan, have a nice day"

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Last night, the Council of Mortgage Lenders said: ‘Lenders are attuned to this issue and will treat borrowers sympathetically.’

So the unspoken message is that the CML aren't coming out to bat for IO any more. To the Daily Mail readers, in dog whistle, "We are going to throw you under the train and call it a crash. Enjoy."

To the borrower who misses the dog whistle, in a High Street bank near you, sooner rather than later...

"I'm terribly sorry we won't be giving you a loan, have a nice day"

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Yes I know, I was renting from someone I knew in Romford. He had plenty of equity as the house was part inherited. So a mortgage of £270k or thereabouts and only paying about £200 a month on a BTL I/O with the Chelsea. I've no idea how he managed that. I think he's now moved into his "BTL" and has let some of the rooms. He's only got to let one and $profit! These people are living the life of Riley!

Chelsea are YBS, somehow YBS managed to acquire the bountiful books of BBS in 08, my savings were withdrew within the week, scummy coontz! I Woll not finance my own slavery!

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