Wednesday, Apr 15, 2009
HBOS offers lifeline for existing customers?
Telegraph: Halifax to rescue borrowers in negative equity with 120pc remortgages
One of Britain's biggest mortgage lenders is offering loans of as much as 120pc of the property value to existing customers coming to the end of their current deal. HBOS, which is part of Lloyds Banking Group, will consider offering a new mortgage to customers in negative equity whose existing deal, such as a fixed rate, is about to expire. Normally such borrowers would see the rate they pay revert to the lender's standard variable rate (SVR) and would be unable to remortgage if the new loan were greater than the current value of the property as a result of the decline in house prices.
Posted by quiet guy @ 08:20 AM (2062 views) Add Comment
16 Comments
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1. little professor said...
So for someone coming on to the end of their fixed rate and finding themselves in negative equity, they can either go onto the SVR of 3.5%, or pay a £1,249 fee to fix at 5.19%.
The second option may make more sense in the long term, but which option do you think most of the sheeple will go for?
The up-front fee alone will put most of the feckless borrowers off. Plus, the difference in interest rates amounts to an extra £210 a month on a typical £150,000 mortgage - that's going to be too much for most borrowers to ignore, especially the sort that were so short-sighted that they bought a house in the last couple of years.
2. bystander said...
Will Northern Crock follow suit as it to is HMG owned????
3. george monsoon said...
Entrapment..
I bet the conditions are rigid... sharp intake of breath if any of these borrowers actually care to read the terms..
4. titaniccaptain said...
Sorry to jump into this thread We are having a drinky poos a few of us from The Economic Voice and your all invited aswell even greenbay
5. sold 2 rent 1 said...
TC,
Would like to but busy that weekend.
Give us more notice next time.
6. titaniccaptain said...
No problem S2R1 lack of notice is due to Renting 2 and myself craving the great real ale served there.
7. george monsoon said...
Damn.. Its a bit out of my way for an evening drink, but keep me posted if any of you guys are thinkinf of getting together in the NorthWest.
8. titaniccaptain said...
Was up in Kendal the other day George Monsoon on a day out from visiting the inlaws from Bowness.......had food poisoning there from a dodgy sausage.
9. crash n burn said...
Is everyone invited? Strangely enough I will be in Bath that weekend and wouldn't mind meeting that mythical TC. It does depend however, just got a new born, so will have to take a rain check. However if the invitation is there, I'll try and make the effort.
10. mark wadsworth said...
As Bystander says, the article did not emphasise that HBOS is part of Lloyds and is 65%-plus government/taxpayer owned. So of course NR will be doing this next.
We knew deep down that the government would STOP AT NOTHING to keep the house price bubble inflated, and hey, they're doing it, which is a disappointment but no big surprise. Will it work? Will it heck as like, it will drag out the misery for that much longer...
11. waitingfor hpc said...
how is this legal? it is running a bank in competition with others at a loss? this is corrupt interference in an industry sector.
and if Halifax can do this then they can damn well pay me as a saver some interest. I am truly fed up with my house fund subsidising some of this crap with NO INTEREST.
sorry....rant over.
12. titaniccaptain said...
Yes Crash and burn all are invited..........the meet up group has been disbanded and would like a meet up for my own site and thought a co ordinated effort with this site to get a few old friends from here who may like to come along yourself included infact everyone from here is invited ..........
13. crash n burn said...
Thanks TC - I will do my best to join you and your friends.
14. ketha said...
I'm sorry to say they already do this, have always done this... all they're doing now is publishing. Currently 95% deals go up to 120%
15. mander said...
Desperation to save the bubble!!!
Lending to people who will default probably because they are more worried about the negative equity? Who's money is it? Your money? New printed money? Forget it, it is the bank's confidentiality rules. Transparancy is not for the banks; how much the banks lend, how much assets they have that is secret in banking and that has to be mentioned in the law as well eventually ...
16. timmy t said...
Given that the greatest Global Financial Crisis in living memory has been caused by lending people too much money against houses which are falling in value, this is not even funny. You seriously couldn't make it up. If there was a GCSE Economics question asking what HBOS should do and someone answered with this they wouldn't even stretch to a fail. They would just lock up the student for being mad.