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Everything posted by abharrisson

  1. On the other hand some people just find simple concepts very difficult to grasp, how ever many ways you put it to them. The thought of someone being able to make money in a property downturn they just do not seem able to grasp... and so reach for the fraud when there is none. And yes where I am right I will fight my corner, and I would agree with you about the slangers.... I absolutely never reach for the insult button until insulted first as you will have seen from the thread which I'm sure you did. Some people just don't seem capable of revising their opinions in the face of the evidence... but there we go thats life. Give my best wishes to the guy who owns the piggy bank, I had a really good laugh about that.
  2. And where does it say "its not fraud becasue you usually don't get caught" or even imply that, infact that particular point is nothing to do with fraud, its to do with why lenders can sell properties BMV even though they might get more if they waited longer with an agent. I suggest you stick to physics, neither reading things , commenting on them or understanding finance appears to be your strong point. crack open the piggy bank.
  3. You are correct that the law demands repossessed properties are fully marketed, however timescales are not covered. Mortgage companies used to sell these things for whatever they could get as quickly as possible through repossession lists, now you are correct they need to be able to prove its been properly marketed, but as I say the time issue is not properly covered. In reallity... mortgage companies use agents they know by area. Those agents know that regardless of whether they think they can get £100k in three months the imperative is to get the best offer quickly. Mortgage companies typically might give agents a month and then stick it in the auction, they will have achieved their minimum standards by putting it through the agent... if it hasn't sold then thats just tough from their point of view. Agents wll also contact property dealers on their books when repossessions and ask them to offer... they'll offer similar money to that which they can get it for at auction. The law is there you are right, but its not as protective as you think.
  4. Gosh tetchy aren't we... loved the bit about a couple of sales presentatioms and some quotes.... they are actually not my schemes... I don't do this... but you did ask me to explain it earlier to you... but you just can't seem to understand. When valuers consider things for valuations most don't even touch the repossession figures that go through auction, most don't have access to the numbers. What they do is have a view of what they have seen and what is beign sold at what price and have a view on whats for sale at what price through agents. They may also use some land reg data... but the auction stuff normally gets excluded because they recognise its a special situation... the properties either need a quick sale which demands a discount on what would be achievable through an agent or the property is specialised and therefore has to go through an auction. Valuers always produce comparables in these circumstances and would also do so in the case I described to you... the last thing they would be in a case like this is on the hook. after all they have valued a £100k property at £100k.
  5. Gosh you really are fighting a lost cause here... I used that example to simplify it for you and to demonstrate that things can be sold for less than they are worth and legitimately have a higher valuation. where you get the valuer in your pocket bit from I really don't know... the mortgage companies in the tyoes of case I have described appoint them, very often they actually work for the mortgage company, the purchaser rarely if ever meets them and rarely even knows their name or sees their report.
  6. This just gets funnier and funnier. Lets take our mythical £100k house... three agents say they reckon its worth £100k and they can find a buyer in say three months. The valuer looks at and says he reckons its fair enough and £100k is achieveable within three months.... but the mortgage company who repossessed it doesn't want to wait three months... so what happens they seek people who can buy now, mostly with cash... they go to an auction where it sells for £65k. if they had waited three months they would have got £100k...... the valuer would still value the house at £100k, the fact that its gone in an auction for less than that is neither here nor there. Its certainly not fraud as you seem to maintain. And as for your point about why would people buy form an agent when they could buy at an auction that was just hysterical.... out of 100 buyers how many do you think would have the confidence and the financing nous to buy at auction... answer very few possibly none who hadn't done it before... its not as easy as raising your hand and saying yes please you know... and with mortgage offers apparently taking up to six or eight weeks now its very very difficult to complete within the 28 day window auctioneers demand....... thats why everything goes for less in an auction becasue its quick and theres a price to pay (by the seller) for that.
  7. Not in your lifetime, or your childrens lifetime, or your childrens childrens lifetime... I'd forget physics if I were you and get real.
  8. What a fantastic thread had me in stiches... terrific... all we need now is alistair darling to clarify.
  9. How's the piggy bank. You're still not of the view that built assets always depreciate are you?
  10. Just as I thought you didn't understand it. Its also clear you don't understand how valuers arrive at the value of properties. Let me put it this way... you have house.. the agent says he reckons he can get an offer on it for £100k.... you decide to sell it at a knock down price to your child for £30k.... by your reckoning the property is therefore worth £30k.... if your child then takes a mortgage on it and the he says to the valuer its worth £100k and the valuer does his research and agrees ... then under your way of working thats fraud..... the above is exactly the same as I have described in terms of process. You think its fraud I know it isn't otherwise it wouldn't be happening. As for banks only giving 80%... rubbish... you can bridging finance as I described for 100%... you can get a btl mortgage for 90%..... sure things a re tighter but not as tight as you think.
  11. Well on that basis no one would be lending money in the UK currently.......which they are.
  12. On the basis that none of has any real influence at all then the you reach the sensible conclusion which is do nothing is best... in fact its the only thing you can do... other than talk about it.
  13. Or you the person who doesn't understand it is.......... To commit fraud someone has to be defrauded remember and in the case I described no one is.
  14. I am not conviced I agree with the synopsis... I think we'll see two years, prehaps two and half of falls max perhaps a year of ups and downs a year flat and then we'll see the market begin to pick up solidly... Combine a say 10% drop over two and a half years with say 16% inflation related falls... so 26% whichever way you cut it, marry that up with earnings rises over four or five years and that should more than normalise the market.... obviously then total number is anyones guess (you have mine) but I certainly can't see prices bobbing along the bottom for ten years. If prices are overvalued (which they are) they will tend to fall until the reach the bottom, they do then tend ot bob around for a little but in my view forget a decade.
  15. Glad to be of help, although form your recent post I don't think you really do understand it but there we go. Oh by the way, its not MY scheme either, I just took the opportunity to explain what was going on as apparently you didn't know.
  16. Ok then lets deal with the other point, originally you said cutting London's GDP (effectively) by 50% would be a good thing, you've now come back and said that the vast majority of bankers work in housing , banking is unproductive, therefore cutting unproductive work is a good thing. I said that cutting Londons GDP would be bad a bad thing and as it would equate to an effective 10% in overall UK GDP... I maintain that. But if you want me to spell it out further for you then here we go. Lets look at it firstly from a macro point of view ... reducing london's gdp by an effictive 50% (about 10% nationally) would massively decrease the tax take, it would in turn put huge pressure on national services , thousands upon thousands of related jobs from retail to transport to manufacturing would go. There is no basis on which you could claim reducing londons GDP by 50% would be a good thing form an economic point of view. You have made some sort of claim that an imbalance in weighted GDP of London compared to the rest of UK would be great , well cutting london's GDP would certainly achieve it, but without any simillarly sized growth in GDP in the regions all it would address is the numbers, the reallity would be the economy would still be 10% smaller, tax take would be lower , services under stress. And I would argue that because of the huge effect London has that reducing its GDP by 50% would actually result in further GDP reductions in the regions , there would be a ripple effect. You have lately treid to clarify this by a sweeping statement that "much of what london does is unproductive and is drag on the economy" well lets look at this . London is a large city, but at the base is much like any other city, it has people working in shops, in travel, in utilities, in government, in parking, in manufacturing, in design, in architecture, in law , in finance etc..... your sweeping statement suggests not only that these and many more occupations are all unproductive but are also a drag on the economy... you propose cutting them in half will radically help the economy... just to show you how insane I find that argument... why don't we enhance it and say London is much like any lrge city, just bigger so if your medicine for london works then why not apply it to every city... lets have half the number of people working in travel, in utilities, in retail, mending the roads, working in manufacturing , trading etc etc... I am sure even you can see that this is wrong. You made a sweeping statement and I am afraid it is utterly and totally wrong. You have then gone down a level and said banking is an example of unproductive work, you have used those involved with housing finance as an example. Well lets look at this especially with your "anti london" hat on. Firstly housing finance is I think a relatively small part of the true city does, when you consider all the other areas of banking. Secondly I think if you want to attack those who work in finance related to housing you really do have to open your eyes..... have a real go... include all the brokers, include those who are involved in product design, include those involved with sales, those involved with processing and at the end of the day those involved in bulk financing. Look at that universe of people and it wouldn't surprise me more than 70% worked outside london.... so suddenly the universe you seek to attack is not in London. oh dear. Now lets turn to the issue of whether or not they are productive. I think we also ought to reach a description of productivity when doing so..... in my view they produce a service people want and need and use and that to that degree they are productive.... I wouldn't if I were you fall into the trap here of trying to say anyone not actually making something is not in productive work.... otherwise you risk damning the whole service industry with one fell swoop. I think they are productive, they produce a product people need they service that need. If you got rid of them it would simply not benefit the economy... lower tax take, no financing available at all for housing (bonkers), reduction in local economies around the country, destruction of the building society movement (who rely on mortgages to be able to offer decent savings rates), no financing would equal no house building etc etc etc etc. The mortgage finance industry is spread throughout the UK , employs a massive range of people and getting rid of it as you propose is quite simply wrong, in fact its so wrong that its not even worth me providing you with any facts and figures... even a blind man should be able to see it. If what you actually meant to say was that you were very cross that some people , originating in the states had turned the whole thing sour through the way they have packaged up toxic loans etc, then thats a fair comment, and actually i think most of them have already lost their jobs.....in the UK we have not had a toxic loan problem on UK originated mortgage finance, the problem our banks have had is that they bought the US problem at the macro level by buying CDO's etc If what you also meant was that the mortgage industry had caused the housing bubble then I think you are right to a degree but conversely I do not think they are ENTIRELY to blame. These mortgage business' have taken part in the world wide debt binge, instead of trying to find a home for blocks of mortgages, the market became so hungry for debt that the mortgage companies almost stood on their head , producing mortgages to feed the debt beast.... you only have to look at private equity, commercial property etc to understand the mortgage market was just another part of the worldwide debt binge.... in free markets once started these things are difficult to stop.... personally if you want to feel agrieved I'd say don't think about crazy schemes to cut london's GDP in half, or switch off service industries that in your view don't really produce anything, I wouldn't even blame the mortgage market..... personally I'd balme the government for not taking a chance in 2005 to bring a more controlled end to the housing market. I sense your frustration, I do think you were wrong in the comments you made and I think perhaps your anger is focussed in the wrong place.
  17. Personally I wouldn't worry about prices going up.... if they do this and it works to the degree they are hoping then I expect we will still see further falls, maybe less steep, maybe over a longer period , maybe less in total maybe not when you include infation into the mix. They are hoping for a manageable decline... but remeber its not only house prices and mortgages that are effected by the squeeze. What we saw was oversupply in credit creating an unsustainable rise in prices. We have seen a very quick and very severe curtailing of that credit which unless unchecked will have the opposite effect. Its good for no one to see booms, amd equally its no good to see radical or overdone corrections. The government will hope the plan delivers a loosening in credit availibility but in way will they want prices to canter forward, I suspect they want prices to decrease, just in a more orderly fashion.... thats I think in most peoples interests as well.
  18. You said you wanted it explained , I explained it, sarky responses don't work well. I don't run courses, and in any event you'd need some nous to be get into this and you probably wouldn't want to anyway ( I know I wouldn't)
  19. Ok I'll bite and help you further, lets have a look at your last point...... you quote the guardian as your bible on this... I don't see anywhere there an analysis that growth 1992 to 1996 has anything to do with house prices... in fact the discussion is about the overvaluation of sterling pre 1992 holding things back, undervaluation post 1992 pushing things forward ... the guardian is in fact totally right that changes in the value of sterling in this way will effect exports and reduce the trade deficit.... of course NOWHERE do they mention house prices. Again, you are wrong to balme falls in industrial output on the door of inflated house prices. If you were to make a more reasoned point that industrial output is influenced by labour costs, trade barriers, exchange rates, tax structures, govt incentives incentives but that higher house prices to a small degree feed into wage demands therefore having some small effect on wage demands (inflation has a larger effect) then I'd grant it, but of course you don't take the rounded view and simply decide lower house prices = raised industrial output, and higher house prices= lower industrial output. The drivers of changes in industrial output are much more complicated than that as I hope you now realise.
  20. Well to a degree with the "takeover" of Northern Rock the government has already underwritten around 7 to 10% of the mortgages out there ... or at least is exposed to their potential failure. If they do something like this it will be interessting to see what happens... if it goes tits up then that will be really difficult for everyone.... the really interessting question is by what measure would it seemed to have worked by. if the plan means that the margin over BOE that LIBOR runs at returns to something like 30 basis points or even 50 basis points and inter bank lending returns then to some degree there would have been a successful outcome by the governements measure. However to really work the measure would need to return some competitiveness back into the mortgage market and to do that it has to enable a whole succession of lenders who have "gone to sleep" to restart their opperations.... without that I expect mortgage rates will remain high simply becasue of the smaller underwriting infrastructure that is available. So from a govt perspective I suppose succes will feel like a return to more fluid inter bank lending within a LIBOR rate that is more reasonable than today, it would also need the competitiveness in the mortgage market to return. I don't personally believe they much care if house prices decline as long as they don't crash, with financing restored there is of course every chance that the landing will be much softer than previously envisaged but crucially but returning to a more competitive charging structure and feeing up the commercial as well as high street banking markets the govt will hope that disposable income levels will be maintained and equally that crucial fianncial support for companies through commercial lending can continue. I suspect if they do manage to pull it off and it faces no legal challenges then it has the ptoential to significantly ease the situation...... however mortgage underwriting capacity won't be created overnight, the banks will look to be maintianing to the spirit of any agreement they reach with the govt but at the same time they will also look errode as slowly as possible the massive margins they have stumbled into. Overall I think the measure has a good chance of success. I am not saying its necessarilly the right thing to do, and there'll be plenty who don't like it. However if it comes in and if it even half works then the effect could be to either take the heat out of the rate of fall in housing prices or indeed limit the absolute fall. I think though as I said the government is less concerned with housing prices than they are with the potential effects of this..... although clearly form a "keep my job" political perspective if it has the knock on effect of phasing or reducing the overall reduction in prices then they will take that as well.
  21. The way out would have been as follows.... his secured loan with northern rock would have been 95% of the value at purchase... so £158K..... he could have sold then for £190 K leaving a net balance of £32k... (originally it says he borrowed £158 plus therefater £50k which would make a total of £208, but the post says he owes £217 so imagine the diff is credit cards) The £50k additional loans from NR would have been unsecured for sure so he can sell and take the £32k. he then has to decide whether the remaining are affordable to pay off once he has gone down the rental route.... if not then the solution is to take the £37k to a debt management aganecy and get them to broker a deal with NR and the credit cards writing off his £60k odd debt in return for £37k in cash plus say 12 months payments of £500 (which he can afford). Not ideal but he's out roughly even, although his credit record would be in tatters.
  22. Of course the downside to all this is that rentals will rise I suspect in this environment quite considerably, forcing some renters to downsize and move when they were quite happy where they were. It'll effect everyone in some way to a lesser or greater degree.
  23. I know you sound perplexed but there are plenty of deals around that are below market value for various reasons. The surveyor always values the property against open market criteria (ie sold through an agent to the general public).... so there are numerous occassions when you can buy a property below what a surveyor would value it at. Buying a property below market value is not illegal, asking a surveyor for his opinion and having him come back and confirm its worth more than you paid is also not illegal, its not overvaluing , its the vlaue as the surveyor sees it, so nothing illegal there. Not sure what you meant by BTL Lender? and yes I am aware this is a Uk site, again not sure of where what you are trying to get at. You asked how it was possible, I told you, you appear convinced either that it can't be done or that its illegal which it isn't, theres nothing underhand, everything is declared in the normal way .... its not like some of the new build sagas where there are some fairly suspicious transactions.... so in summary yes its still possible for property investors to buy effectively with putting no money in and perhaps depending on how well they bought making a profit. I would also say ( and it won't please many here but its life) that as the crunch bites further and price drops accellerate, lenders will speed up repossessions and will (under current legislation) have to fully market repossessed properties through an agent, but if they do not sell quickly then they will go to auction. auctions are normally stuffed almost exclusively with investors... if a house is repossessed and the owners thought they might get £150,000 with an agent ( and that might have been what the value was estimated but financing probs, peoples fears got in the way and the lender put too tight a time limit on it) and it does not sell very very quickly (not much will) then they'll put it to auction, the invetors might buy at say £100k or even £90K.... even with the falls the investors will have got a bloody good deal... problem being the people who owned the flat may have lost all their equity or worst case have the banks chasing them for years becasue of negative equity......... In a downturn where properties are repossessed and go to auction, the original owners always will lose out becasue of the time pressure the banks put on it, and the investors will normally be the ones to benefit..... I am not saying this is a good thing, just how it works.... and by the by when the investors takes finance on the property he bought for £100/£90 it might well attract a valuation of £150k meaning if the numbers work he could get a mortgage for £127k.... in other words he'll have put £37/£27 k less fees straight in his pocket.
  24. Some areas won't be as badly hit as others thats true I suspect, whether scotland at the regional level is one of them we'll have to see, but even if scotland does OK I am sure there will be pockets within it that get hit as hard as anywhere else.
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