Thursday, Jan 28, 2010
Next Years Repos lining up
Mirror: Greedy Mortgage Lenders
Apparently 400,000 mortgages are in arrears according to the FSA.
Angry because mortgages lenders are charging a fee for people not keeping up their side of the bargain.
Seems quite reasonable to me, I seem to recall a sentence saying @Your home could be repossessed if you do not keep up repayments'' on the bottom of mortgage applications.
A small monthly fee instead seems quite fair, particularly as mortgage rates are so low, the total is still probably less than monthly fee a year ago.
Posted by str 2007 @ 05:49 PM (1235 views) Add Comment
11 Comments
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1. jack c said...
The link doesnt work for me however lenders have a tariff of charges which are published and sent out with the original mortgage offer - they are sometimes also sent out (because the lender can often vary them) with the annual mortgage statement. Most people never read any of the terms and conditions although buying a house is generally the biggest financial commitment anyone ever makes ! - the tariff of charges comes to light when repayment difficulties arise. If the FSA under the TCF regime clamp down on arrears charges etc.. then it will add even more weight to my 'Silver Bullet' theory of rising interest rates (the actuaries will simply inflate the mortgage rate to cover the loss of revenue on the tariff of charges). More evidence that the FSA and Government have no idea of how things operate in the commercial world.
2. mark wadsworth said...
Agreed. This is just the left-wing spin on Home-Owner-Ism - when it all goes wrong, just blame the 'greedy' banks, cue benevolent government to help the "hard pressed home-owner"
As somebody else once said "If you haven't budgeted for interest rates of at least 6% you shouldn't have a mortgage in the first place".
Yes, I feel sorry for people who fell for the lies or have lost their jobs (or both) but hey, such is life.
3. rumble said...
I believe that's just under 3% of UK homeowners.
4. braindeed said...
3. rumble said...
I believe that's just under 3% of UK homeowners.
So I presume that your point is that 97% are intact. The point about mature markets is that they settle at a 'market' value......even quite small variations from the 'norm' can have quite dispropotionate effects on price.
However, these are not normal times, and recent ( say since the seventies) history would have meant wholesale repos and a return to market 'norms'.......I'm now turning bullish in expectation, but i'm disappointed that the BTL scum haven't been shaken out the tree.
It's hard on the young, and others who have applied 'prudent' princples to their finances.....bad for society, IMHO.
5. matt_the_hat said...
I believe that's just under 3% of UK homeowners.
I believe that the fat (profit margins) on mortgages is probably a lot less than 3% so if they default, BANG!
6. Exiges said...
I just love this: FSA mortgages director Lesley Titcomb said: "Lenders need to be in no doubt of their obligations to customers who fall behind with payments."
Erm.. well, Borrowers should be in no doubt of their obligations to the Lenders.. pay.
7. markj69 str05 said...
@braindeed...'but i'm disappointed that the BTL scum haven't been shaken out the tree.'
Disappointed yes, but not surprised. Nothing has been done to address the problem with BTL'er. Low interest rates have enabled a lot of debt to remain, both for 'home' owners, and 'property investors'.
Anyone with a mortgage has had an easy ride so far. And those with large mortgages have benefitted the most. IE Investors with large mortgaged portfolio's. All at the expense of the tax payer, teh saver, and anyone trying to improve their personal home situation (Esp' FTB's).
8. rumble said...
Braindeed, just triggering some reading - my thanks - I share your disappointment and opinion. I was expecting a response more along the lines of Matt_the_caver, exploring the ripples of the 3%.
Mark, not surprised having seen how things have played out, but surprised they have been played out this way.
A stab in the back from the gov.
9. markj69 str05 said...
rumble...'A stab in the back from the gov.'
I couldn't agree more. Their actions have influence far more people than realize it, and will continue to do so in more extreme ways over the next few years.
10. Andy_mn said...
@matt (5) - although only 3% of homeowners are in arrears, not all homeowners have mortgages - 44% were outright owners in 2007/08 data. If 3% of the 66% who have a mortgage are in arrears, only roughly 1.5% of homeowners are actually in arrears, which is an even smaller (though not necessarily unimportant) proportion.
Also, in 1993-94, 6% of mortgage holders were in arrears, which puts today's 3% figure in perspective.
See http://www.communities.gov.uk/documents/statistics/pdf/1346239.pdf for details on arrears, and http://www.communities.gov.uk/housing/housingresearch/housingstatistics/housingstatisticsby/housingfinance/livetables/ for details of outright ownership versus mortgages (2007-08 data).
11. rumble said...
Andy, interesting, but that 3% is my incorrect figure which ignored outright owners, so in fact it should be 5+%. of mortgage holders, as you clarify, 1.5% of homeowners - so we're almost where we were in '93-'94