Sunday, Aug 23, 2009
Rumours of repos being held on books?
BBC: City Diaries: 21 August
"In recent weeks I've been hearing rumours that our state-owned mortgage lenders are holding tens or even hundreds of thousands of repossessed houses on their books. The government cannot face the humiliation of dumping them on the market but at some point this inventory will need to be disposed of. Just what price this will occur at, nobody can say for sure.
So when "end of recession" is spoken of as a wishful shorthand for a return to "2007 levels of lending" and steadily rising house prices, the collective delusion of our times is laid bare. We seem to be hellbent on trying to forget the lessons of the crisis. "
Posted by phdinbubbles @ 09:51 PM (1336 views) Add Comment
16 Comments
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1. cyril said...
The govt has always had a vested interest in high house prices but now even more so because they own a lot of them via the state-run banks. I expect the rumours about unsold repos are true. The only way HM Treasury will get their bail-out money back is if house prices go up again, and a lot of reposessions on the market is the last thing they want.
The trouble is, when the Tories get in, they will be in exactly the same boat so I fear that another house price boom will be engineered whoever is in power.
2. mystie010 said...
I can't believe this about hanging onto repossessed houses. If this is true then.... - well I'm just stunned I just don't know what to say. This would completely mess with the market. We are all being taken for mugs!! I often wondered where all of these repossessed properties were - well now we know. This should be front page news!
3. nubbers said...
The same has been happening in the US, where lenders are desperate to reduce the flood of forclosed properties. Looks like we are catching up on that front too. I wonder if we will hear more about this after the next election?
4. paul said...
I'm quite sure the European Competition Commission and the IMF would be interested in this ...
5. devo said...
State-owned mortgage lenders are holding hundreds of thousands of repossessed houses on their books.
6. Roger said...
Why doesn't someone make an FOI request to get the exact figure?
7. uncle tom said...
I don't think one should read too much into this 'rumour'. I doubt there is much of a delay putting repo's on the market, and from local experiance have noted the process starting before the previous occupant has left.
Empty properties need to be protected, and when the mortgage lenders eventually seek to recover their loss on a sale (which they are entitled to do) from the mortgagee, they need to be able to show that they acted reasonably, without incurring excess losses through neglect.
Whether the mortgage lenders are taking borrowers in arrears to task soon enough is another matter. There may be some creative number crunching when it comes to defining the number in arrears.
8. devo said...
6. uncle tom said... There may be some creative number crunching when it comes to defining the number in arrears.
Are the mortgage lenders predicting an upturn in the financial outlook of those in arrears?
9. Curious1 said...
I think an email campaign to our MP's demanding that they can confirm or deny this allegation is required. If the state-owned banks are indeed holding back properties, then I'll be demanding an explanation from my MP.... as a voter I demand the right to buy properties at fire-sale priceses!
10. taffee said...
I believe that the lenders are effectively repossessing the property whilst letting the previous owners stay there
Kind of fits in when you consider 207,000 people are in arears of 3 months or more
11. Theemperorhasnoclothes said...
"Younger colleagues had only heard about recessions in textbooks or from their parents. Now, as they labour under enormous student debts, they are shocked to be living through one. Suddenly debt doesn't seem like such a good idea."
This makes me laugh! These are our top brains. But they don't understand the dangers of getting into debt, event when they are spelt out in the very textbooks they read.
12. brickormortis said...
"We seem to be hellbent on trying to forget the lessons of the crisis."
And this, in my opinion is the crux of the current issue. Back to business as usual. That is exactly what all the new and old and next generation "property investors" are wishing for!
13. mark wadsworth said...
The rumour as such is almost certainly true, but he says that the banks are hanging on to "tens or hundreds of thousands" or repo's. I thought there had only been about one hundred thousand repo's in the past year or two, so even if the banks hung on to every single one, they'd would only have one hundred thousand.
Apart from that, I agree it's disgusting. But this government will stop at nothing to try and prop up house prices, surely we all knew that?
14. the number cruncher said...
I wondered why houses where defiyng gravity so much, I doubted it was phycological. This must be the reason, grand market manipulation. I should imagine the gravity defiance will last until the next election at least.
The rental market is still holding(not many new rentals in my village so where are all the repos?)
I think all HPCers need to investigate the 'repo to rent' scam and see if it is real. The only justification for the banks is captial appreciation in the meduim to long term, but i doubt this will happen - I hear the zombies moaning...
15. Repoman said...
It isn't just from the last couple of years. I had a house repossessed years ago and it never came back on the market for sale. I know of around three other properties that have been in the possession of the bank for years. I have no idea why they didn't sell them, especially as there was a lot of interest.
16. Repoman said...
One other thing to bear in mind, is that houses close to repossession will often be handed back to the bank instead of going through the whole process (sometimes deals are even made). If you are in negative equity and have a 100%-125% mortgage and can't afford the repayments, what is the point. Of course if you give it back, it doesn't class as a repossession.