Friday, Apr 06, 2007
Lefties! - It's called MARKET FORCES!!!
BBC: Calls for end to US repossessions
A coalition of civil rights groups in the US has called on sub-prime lenders to stop repossessing borrowers' homes.
Posted by tyrellcorporation @ 10:40 AM (167 views) Add Comment
13 Comments
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1. confused76 said...
Well... if protection against first home repossessions are introduced (or if there is just the possiblity that governments may consider that) it will have a big big impact on cost of mortgages. Likewise, if protection measures in favour of tenants are introduced (i.e. longer notice periods, rental increase caps...) that will help collapsing the BTL... Politicians will support policies that attract more votes, if the lobbies of home resident/owners and tenants gain strength...
BTW, limiting the power of banks to repo homes may avoid a huge plunge in house prices that (even we agree) are bad for the economy in general
2. japanese uncle said...
And that market force is simply wrong. The loss should primarily be borne by the moneylenders. We need laws to enable those lenders to collect money from those cowboy CEOs, executives and shareholders pocketing millions through mismanagement as we cannot blame thousands of clerks working for banks and BSs. This should apply to the pension black halls. Pension funds must recollect money from the corporate shareholders who received payout that ought to have been retained/contributed to the pension funds. CEOs and executives who allow this to happen also must pay back millions to the company/pension funds. The fair solution is as simple as this.
3. royston said...
Problem: These mortgages have been turned into mortgage bonds and are sitting in our pension funds. If the debtors don't pay or pay less, it reduces our already beleaguered pension pot, i.e. you and I would stand even less of a chance of having a pension than we do now.
4. European-bear said...
Royston...if pension funds own many of the mortgage bonds it is still better to get a reduced value than a very reduced value. A hughe wave of repossions with houses auctioned off a rock bottom prices will do more damage than renegotiating the terms of the mortgages to help the sub prime borrowers to survive. And many of the sub prime borrowers have sub prime property...I was recently in the US looking at a job and quality property ion good neighbourhoods is...well good. But look at the cheap stuff and really they are just a collection of shacks on a lot.....
5. tyrellcorporation said...
Royston I'd suggest you forget about pensions unless you are in the Client State! I've done the calculations and I don't even pay National Insurance anymore because it simply isn't worth it. I'll never see any State pension as I'll be required to work 'til 80 by then. The system is collapsing...
JU, whatever happened to Buyer Beware?!?
6. royston said...
EB/TC,
No, no. You're both wrong. We just have to keep buying and pushing the prices up. Then people can take mortgage equity withdrawals and pay their mortgages - see? Simple!
7. The Baldman said...
If a bank can not reposse then I assume that the interest rate margin on new and existing mortgage business will have to increase, to reflect the increased risk, as effectively the loan becomes unsecured.
8. magnifico said...
Tyrrelcorporation said <>
TC I couldn't agree more. These are the people who would crow about how much their homes ( and therefore themselves, in Capitalistic speak) are going up in value. If you borrow too much, relying on prices going up and up, you are in effect taking a gamble, if you win you uncork the bubbly but if you lose you can't go back to the bookies asking for your money back, effectively blaming them for allowing you to gamble too much.
I don't particularly like these irresponsible lenders, but the blame for financial ruin must rest with the person taking on the mortage.
9. holding out said...
TC,Magnifico - Caveat emptor.
If you bail people out everytime they borrow too much or don't save anything they'll keep on doing it. It's just like the pension problem there is no incentive to save because you can rely on the state. If you do make the effort you're penalised.
10. royston said...
Guys,
I wholeheartedly agree with you about the speculators who are gearing up to gamble on house price increases, and I recognise the moral hazard problem. But what about the ordinary person who wants just one home in which to bring up their kids? If you study hard, get well qualified and do a job which is a service to society, should you not expect to be able to earn enough to afford a decent home for your family? Right now, the general attitude seems to be "f*#k you, you didn't get in early enough". Do you really think that is fair? Is that the kind of society you want to live in? Personally, I don't, so I am exploring job opportunities abroad.
11. Tony Marshall said...
Personally I think the lenders carry a significant part of the blame. Time was when banks would only lend if the borrower could be sure to meet the repayments, but now they lend willy nilly, with the person arranging the deal and his boss and his boss (etc.) on a bonus for lending ever more money. The problem is that people grew up under the old system and believed that the banks would not lend if it wasn’t the right thing to do. Banks set themselves up as financial advisers and therefore have a duty of care to those they advise to borrow. If they fail in that duty then they become substantially liable for the loss of the customer. Having said that, I have no doubt that the small print in their literature gives them a get-out, but morally they remain partly responsible. On the subject of small print, I would like to see a law that makes all small print null and void if it is so small or so much or so badly worded that the customer stands no reasonable chance of understanding it.
12. Rimmer said...
I really do hate to sound heartless here but people that have dont have a good credit history, have CCJs, have been declared bankrupt etc dont deserve to be lent money - ITS BLATENTLY OBVIOUS IF THEY COULDNT PAY BACK BEFORE THEY WONT NOW!
I have spent lots of time working in the US and to be honest they dont go with the UK "Bubble Wrap " Society the BBC likes, if you cant pay you dont get, they deal in the real world not the UK Virtual one.
13. Rimmer said...
Royston
Trouble in the UK i agree but its not actually did you get in soon enough, 25 years ago the UK went to joint incomes and thats the basis we now have, i see articles in papers and on the TV about single " Professional " teachers etc that cant afford to buy a house.
The first question is could single teachers in the UK ever afford to buy a house in the past?
The second one is would it be a viable thing for a single teacher to do given rates and costs etc.
I ask you all >>>> if it was for sure house prices in 10 years would be less than now who but those that wanted a home would be looking to get mortgaged up?
Food for thought.!
Royston - The US house prices are still considerably lower than the UK especially when you consider what you get for your money.