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About Waitingforhorsemen

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  1. Did a bit of googling and found this site http://www.adverse-mortgage-centre.co.uk/d...y-mortgage.html which seems to suggest the mortgage (at least) remains a liability after bankrupcy....not had time to digest it properly.
  2. SOIEITY does help! The social security system, NHS etc (though in my opinion extremely ineffecient) do provide a safety net to all. So hardtimes in this county do not really equate to life threatening hardship. I would not have it any other way as, to some degree, we are all in it together. With regards your example of businessmen who have went bankrupt through no fault of their own I think if you reread my original post you will find that I was supportive of such people - so I am not really sure what your point is. The people that our in my line of fire are: a) Businessmen that manipulate the system to bankrupt one company and then 'phoenix' another company up leaving their creditors high and dry Directors of companies who have manipulted the bonus system to allow them to pay themselves large bonuses at the shareholders expense (though more fool them) while they knew or professonally SHOULD have known that their actions were destroying the value of the company c) People who took out loans which they could not repay - and BTW people should be factoring in the liklihood of losing income BEFORE taking out loans I really do not know whether creditors can call on a bankrupt's assets after they have discharged - could someone clear this up? The reason I hope this is the case is that to forgive debt encourages feckless behaviour and drives up the cost of borrowing to ALL individuals and businesses. I always thought bankrupcy protected the debtor from over zealous creditors for a period so they can get back on their feet NOT FORGIVE THE DEBT. ...and the anwser to your question why would anyone every bother to rebuild if they knew they had to repay the money is that IT IS THE RIGHT THING TO DO. If they want to live on the breadline and have a meaningless existence to avoid repaying debts they ran up that is of course up to them.
  3. I do not recall saying that they should be hung, drawn or quartered!!! You cannot be bankrupt if you have not taken on a debt. If you have taken on a debt you have an obligation to repay it whenever you can. Take your young lady I doubt that anyone on this board would have anything but sympathy for her BUT you are taking an extreme example to ask for forgiveness of debt for the feckless- and then have the cheek to tell me to get off my high horse. A classic playschool debating technique - well done. There will no doubt be innocent victims in this but that is for SOCIETY (i.e. all of us) to help NOT the individual organisations to whom they are indebted. I think bankrupcy for people in those circumstances actually works quite well at the minute BUT if she - 20 years later -won a million in the lottery or something I would hope she would feel obligated to repay her unpaid debts (which BTW could have led to someone else being bankrupted - or do they not deserve your sympathy) and, if not ,I think she should be COMPELLED to.
  4. I have no idea whether this is correct but I heard some people who had declared themselves bankrupt during the last housepricecrash and had not paid off their debt during their bankrupcy term were recontacted by Banks over their outstanding debt after they got themselves back on their feet during the subsequent noughties housing boom. IS THIS TRUE? I hope so....and I hope it happens again!!! With regards a previous poster noting that theere was no moral obligation to pay a bank its loan I would respectively disagee. WHile I would accept that most people who have made money in the Financial Services (over the last decade at least) have done so on the back of a massive fraud and that some people use loopholes to encourage businesses to effectively fleece their creditors and shareholders, that does not mean we should not hold ourselves to a higher standard. One of the more worrying aspects of this depression is that if the above groups are seen to escape punishment the masses will (understandably) say why should they pay....then you are talking about a complete breakdown in soceity. Remember somewhere behind a bankrupcy is an unpaid debt (or promise to a creditor) and,at the end of the day, it is the bankrupt who has effectively 'stolen' money by being unable to service their debt. I think we need to look at a two-tier system whereby if companies go bankrupt (whether or not in the process their Directors are bankrupted) there is automatically a court of enquiry (like a coroner's court but a company has died!) into the behaviuor of the Directors preceeding the company's demise. If the Director's are found to be complicit through either fraud or complete profesional incompetence then, regardless of the absence of guarantees, the creditors should have a claim on the Director's assets (potentially bankrupting them) AND the case passed to the CPS for investigation into fraud. This would apply to the CEOs and xEOs of Northen Rock, HBOS etc. On the other hand if the Court of Enquiry held that the Directors could not be held responsible then, even with guarantees in place, the Directors should be dealit with less harshly and I think being bankrupted for 1-2 years is sufficient. For individuals who have bankrupted themselves through purchasing goods and services for themselves INCLUDING HOUSES the bankrupcy should be severe and I personally would like to see bankrupcy only providing a period of protection from creditors to allow them to get back on their feet NOT the forgiveness of the debt. I am not aware of the detail of either fraud of bankrupcy laws so I wonder to what extent new legislation would need to be passed to make the above reality or whether it is actually covered by existing laws if they were enforced.
  5. Thanks RockyBalboa for reminding me what is important! And I for one will be double reading my posts before hitting fire in the future. Lets say you are facing a big loss, the important thing is to stay calm and remember what is important i.e. your health, family, friends and loved ones ...wealth comes and goes but it is only if you lose those that you have to worry! You may just find out how durable you actually are. What's the worst that can happen ...you are bankrupted. Big deal...many successful businessmen have bankrupted themselves once and then rebuilt. I can tell you after this there will be many in the same boat after this storm has passed. Work out what the facts are, what the variables are and then decide on a course of action. That is a positive use of time. Worrying about it is not! I believe that there is more than enough information on this thread to do this already so I would caution about torturing yourself needlessly by continuing looking at this thread on the site (although if you are genuinely interested in economics & markets some other threads and links are very interesting) - a better use of time may be to go for a walk, spend time your friends and family, kick a ball around. If it turns out you are going to take a hit accept it & prepare for it, like many things the anticipation is the worse part of it. BTW There are some pretty savy operators on this site and if you can take the sharpness of their tongue you might get some good advice (or at the very least an alternative viewpoint). As it happens many of the people on this site made a deliberate decision to sit out or at least minimise their exposure to the property market from the start 2005 onwards (or in my case 2004) - you can imagine that after years of thinking they were wrong they are now beginning to feel vindicated. In addition there are many idealists who can see what has happened over the last few years is the economy has rewarded speculation over genuine wealth development and have not been happy about it. Add to that the fact that the government is trying to prevent their prudence being rewarded and you have some people ready to direct fire on people who have treaded a different path.
  6. This from the person who accussed me of not reading prior posts!!! I believe if you look through some earlier posts someone mentioned the possibility of such a penalty clause. I would add that if I was in your shoes I would pray that there is such a clause as it may effectively limit your liability if you do not complete. Without such a clause not only would you lose your deposit the developer would be able to (and be obliged to) sue you for the full difference between the value you agreed to buy at and the value which the property developer managed to sell at. Which is similar property developments in Leeds for example could be (on a 300k) property round about 150k. Of course if I had a purchased a property myself I would know off the top of my head the precise terms of escaping the contract but I haven't and I do not.
  7. Gazza....a word to the wise - morally do not feel obliged to complete if otherwise you would not. I would say not honouring the contract would be not completing and trying to get out of paying the penalty charge. Not completing is covered by your agreement so you are still honouring the contract if you can see what I mean. It may help your discussions with the property developer if you actually took a hardline i.e. "I am looking at dropping out, what are you going to hit me with? Fine, I can absorb that. I guess I will look at buying in 3 years time when the market improves" ....and then see what he does to try and talk you out of it...and do not look for an immediate response. This might be your best chance of getting a discount - although I still think this is unlikely. Anyway good luck in whatever you do....it could be worse -imagine if you had 1000s of these on your books!
  8. Lets assume your property was bought at say 300k. The developer will know if you pull out he can get at least 90k out of you (10% deposit plus 20% penalties) therefore if he can resell to someone else for around 210k he will be no worse off. Now you could argue that the market falls to 150k (50%) the developer would actually be 60k worse off - and you would be right. The only thing is if that is the case (and assumming the contract does not make you fully liable for the difference between the contractual price and what the developer sells at) you would be 60k better off dropping out of the contract, taking the penality clause, saving up another 15k for a deposit and buying on a 135k mortgage in a couple of years. If your salary is around 100k (so you can save around 40k a year without much difficulty) you could be back ready to enter the market when the property has (according to some commentators) suffered its worse falls. Funnily enough your total outlay would on a 150k house be [15k+135k(mortgage)+120k(interest on mortgage)] 270k over 25 years. Substantially cheaper than if you had completed [30k+270k(mortgage)+240 (interest on morgage) of 540k] on the existing contract. Making the loss of 60k now seem like a drop in the ocean. BTW I am actually trying to be helpful - believe it or not!
  9. Sorry for the rant earlier (Monday morning agression I guess)...but after a quick browse of the previous texts I thought you might benefit from a dose of reality from an outsider. BTW Gazza982 I think you will find affordability is very much the issue as, if you cannot raise the finance it is not affordable. Sadly the market makes no distinction between those who had bought as an investment or those who had bought as a place to live. Either way as everyone (refreshingly admits) you agreed to pay way over the odds for these houses. Although, as you say, it costs nothing to talk to the developer and hope for a compromise it does cost you in terms of the time wasted hoping for what is quite frankly a very unlikely outcome. I think you would actually be better placed to pencil down some numbers based on a realistic assessment on what is going to happen to the properyy market over the next 10 years, your access to money (over the next 10 years interest rates are, I suspect, going to be higher than the last 10 years) and indeed your employment prospects. You will also need to bear in mind that even if you do try to stick it out the reality is that others will not or will not be able to and what may have been a 'professional' area turns into a more mixed area as units are given over to Council Housing which will depress values further. Is this the dream you were buying into (perhaps you are into 'sustainable communities' or something!) If you cannot get the finance now you are in severe trouble and your options are basically very limited. I would offer some advice in that the first loss is usually the cheapest and it may be that realising a loss now, getting out and rebuilding is a braver and better choice than hanging in there....and hoping something will turn up. I saw (I think) in an earlier post that there may be a clause saying that you occur a penalty of 20% (plus 10% deposit) if you pull out. This might be actually good news as it may limit your liability to 30% rather than the difference between the agreed price and the price the developer sells it at - which would be the case for sure without this clause. If you take the view that property in this area could fall by more than this (at less face it that is not unlikely) then taking advantage of the getout clause and then rebuying in a couple of years would make financial sense even if you could afford the finance now. Given the gains in the property market in NI, the scale of the recent loss in value, and the looming unemployment (if decent firms like Nortel are going to the wall , KPMG on a 4 day week etc) it is hard to see how the situation will get any better over the next 36 months so this might be a good option. BTW SSNomadic suing people that cannot complete may not be what you want but is actually an effective way of maximising the amount of money recovered from people who try and dodge their contractual responsibilities. I think you will find that the property developer is under an obligation from his shareholders and financiers to maximise the earnings. Also there is a reason why the banks do not want to finance more than 80% of CURRENT VALUES. It is because they think it is a BAD INVESTMENT and do not want to be liable for the loan if the house has to be sold at depressed values (or even normal values) if, for example, you suffered a reduction in income i.e. lost your job. If you REALLY think it is a good investment then you will need to privately raise the money by investing more of your own (or friend's and family's) money into it. Now is the time to downsize your car and release investments from the stock market. If you still can't afford it then you perhaps could look selling a percentage of your property to a housing assoication or something. At least this way you are in control and not relying on a miracle reduction in a previously agreed price. I hope this post was a bit more constructive....sorry about the last one!
  10. All, As a Belfast boy living in London for the last decade I have watched in amazement at the growth in houseprices in Northern Ireland during a time when, if anything, wealth producing business (i.e. excluding public sector ,quasi-public sector (i.e. HR, legal) and property speculation) have declined. Anyone who bought into the tq with a view to BTL was speculating that the property price was to continue to go up. To complain now that the pendulum has swung the other way is laughable. Let me spell out what the future will hold... 1. If you do not complete you will lose your deposits AND the property developer WILL SUE you for the difference between the price eventually achieved and the price agreed in the contract 2. If you do not have the money to pay YOU WILL BE BANKRUPTED...and a charge placed against your other properties (bearing in mind they will have decreased in value as well!) as well as any funds or cash you own. Sadly the banks that were stupid enough to led you money which you cannot pay back will have to post a loss which will be ultimately picked up by the taxpayer and mean higher taxes for a future generation. 3. It is likely due to your failure to meet your contractual obligations that the PROPERTY DEVELOPER WILL GO BANKRUPT if the price they can then resell the properties is less than that needed to be viable THAT IS WHY THE PROPERTY DEVELOPER WILL NOT BE SYMPATHETIC TO YOUR PLIGHT ---IF THEY MAY GO DOWN THEY ARE CERTAINLY GOING TO TAKE YOU WITH THEM!!! 4. Obviously banks which have lent the property developer money will also have to post a loss in this case 5. An Administrator will then sell the properties at a new market rate (probably less than 50%-60% current value) 6. Businessmen, housing associations and normal people WHO WERE BOTH SMART ENOUGH AND PATIENT ENOUGH TO WAIT will then buy at the new market rate 7. The regeneration of the tq can begin again That is the reality! I am sure if prices had doubled again we would all be hearing about how clever you had been making 250k on a 25k deposit. Prices are halving so you are going to have to take at least a 100k loss...I hope for the property developers, banks and ultimately the taxpayers sake you are good for it!
  11. Seen an excellent post on other thread pointing out why banks will not be too keen on this....but I think we owe it to ourselves to raise awareness how daft this is. Otherwise we cannot complain when no one understands why 'hard working families' should not get help. People default in two years instead of realising loss now Government liable for bank loss due to rolled up interest Bank loses another 20% on house which has to be sold anyway Goverment either owns bank or has to bail out bank with public money Sterling continues to go through floor Less money available for businesses which make/ do useful stuff Pound goes through floor (even more) ...everyone - but especialy pensioners - get hit with high food and energy bills Recession deepens Families who would have scrapped by get sucked into debt and need help Loop back to top and repeat ad finitum (until UK diappears up its own debt hole)
  12. Like many of you I almost choked on my cornflakes when I heard the lastest government scheme to help 'hard working families' by acting as a guarantor on mortgage interest payments enabling homeowners who have lost one of their incomes to take a mortgage holiday. This is a redirection of public money towards a very specific group - Homeowners who have over extended themselves so much that they cannot lose one income for even 6 months without having to default on a promise to pay a bank the agreed interest on their loan. It therefore punishes the prudence of the both renters (who refused to over extend themselves) and homeowners who have taken out insurance against loss of income or who refused to either trade-up on property or withdraw equity from their house to enable them to build of an unemployment contingency fund. Can we get a petition together, send it off to No.10 and also send copies to your local MP AND OF COURSE SIGN IT! Some proposed text.... We understand that the government is considering acting as a guarantor on mortgage interest payments enabling homeowners who have lost one of their incomes to take a mortgage holiday. Given the size of public sector debt we believe that public funds should be rationed to provide basic accommodation needs to those who need it the most. We believe that, despite its faults, such assistance is currently available through Council Housing or the Local Housing Allowance. The proposed mortgage holiday scheme and the mortgage interest relief scheme provide a much greater degree of assistance to homeowners (many of which still enjoy huge increases from the purchased value of their property) than to renters and thereby introduces a 'two-tier' benefits system. It also punishes the prudence of renters (who refused to over extend themselves) and homeowners who have taken out insurance against loss of income or who refused to either trade-up on property or withdraw equity from their house to enable them to build of an unemployment contingency fund. Ironically such a scheme is unlikely to help its target group. In the current climate it is likely that a family running into financial difficulties now would be better of selling their house now and paying off their debts before the house value falls (according to some commentators) an additional 20% next year. Even if bankruptcy is unavoidable it would be better for families to face it now rather than waste time and money avoiding the inevitable. By having to put money aside to cover these defaults the government is reducing its ability to carry out actions that will help the majority of citizens such as lowering the taxation on business which will be needed to provide future growth for this country. This misdirection of public funds will ensure that the recession is deeper and longer than it needs to be and therefore will ensure that more families will lose their homes than would otherwise have been the case. .................... OK its not great but its a start. If everyone can contribute something then we can distill it down until we have something that is usable. BTW is the last para going a bit off topic?
  13. Fair point but given that the goverment has now semi-nationalised the banks I would prefer the goverment made mortgage interest relief a benefit that would be repayable i.e. a loan against the property (if there is still equity in it) rather than a handout.
  14. Some one with £30k mortgage outstanding on their property has probably IN EXCESS OF A QUARTER OF A MILLION IN EQUITY. Why are they entitled to benefit at all? Can they not get equity release? As a taxpayer I am happy to provide a safety net to stop people sleeping on the street but really that is it.
  15. I love these "Life is unfair and always will be" responses. I guess we best not visit this forum, voice our views, campaign for change or do anything at all then. It is hard to say the system is unfair when the rules are being rewritten almost constantly in an attempt to save the feckless and the government BUT In general I think the government introduces unfairness (and increases costs) by overcomplicating the system. PROBLEM: Family cannot afford to pay for suitable shelter and as a soceity we agree that everyone is entitled to basic shelter. ANSWER: Provide minimum suitable accommodation (Council House) or pay benefit to enable famility to obtain minimum basic accommodation (LHA) ...simple. Of course if the family wanted to they could use the LHA to pay part of their mortgage interest....that is up to them to negotiate with their lender (and possibly their family and friends) to make up the shortfall. EVERYONE gets the same safety net and I for one do not mind contributing my tax to providing it. I await for a sensible defense to homwowners getting advantegeous treatment i.e. not luminaries such as "that's the way it is" or "poor homeowners they are losing equity" (unless they can explain how that asset should be treated differently from stocks & shares)
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