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House Price Crash Forum


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About jacob

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  1. I started this thread because I was thinking about the possibility that either the original lender or (more likely) the investor that bough the repackaged mortgages could have an incentive to go after self certification fraudster (maybe some very aggressive hedge fund could be tempted). The point is that it could be very lucrative to buy a pool of selected mortgages that are valued at a severe discount and then try to either - ask for the borrower (fraudster) to settle the fraud case for a certain amount or maybe agree to switch to a new interest rate that fully takes into account the real risk (15% maybe) or, even better, - enforce repossessions if the contract lists deception/lying on the application as one of the cause that allow the lender to dispose of the collateral (i.e. take the house). In this case the holder of the mortgage gets back the full value of the loan immediately. This is an unlikely outcome but we all know that if someone can get away with this it will happen (e.g. i don't think that "vulture funds" care too much about their reputation, especially if based abroad...). Concerning your last post: In such a scenario the holder of the mortgage will not "go to the police" but contact the borrower directly and threat legal action or maybe go to court directly. The incentive to go after the fraudster and claim compensation (or repossession) is there regardless of the fact that the repayments have been made or that the borrower is not in negative equity. It is only about making money by taking advantage of people that have been foolish enough to sign their own criminal conviction. Does anyone know where to find a copy/template of the self-cert contracts made a few years ago?
  2. It is true that the banks didn't check the application carefully but that doesn't mean that they endorsed or allowed the fraud to take place. I was just wondering if, besides all the criminal consequences for the borrower, a scenario where the lender repossesses the house just because of the fraud (false information) is possible. Let's assume that the mortgage on a lenders book cannot be securitizied because there isn't a market for them or, in the case of already repackaged mortgages that the investors cannot sell their positions at a decent price (i.e. they can only sell at 15% of the face value). One way to create liquidity (convert the mortgage into cash) could be to force repossessions and cash in the market value of the houses (maybe at 30% of face value after costs). In such a scenario vulture funds could buy mortgage pools and throw people out of their house even if the mortgage payments have been made.
  3. What if the mortgage is worth less than the house value (i.e. house bought in 2004). Can the lender claim that the he wil reposses the house because there was an intitial breach in the contract? After all the house is his collateral and he doesn't necessarly want to keep the mortgage going....
  4. I was wondering if anyone knows what would happen if the lender can prove that the self certification information provided in the past is false (e.g. the stated yearly income is wrong). Do these mortgages include clauses that state that if the information provided is deliberately misleading this is enough to end the mortgage and eventually cause a repossession? This would be another twist in this crazy story...... Thanks in advance for any reply.
  5. Cutting tax is always good but will certainly not reduce inflation. The reason why interest rate are going up everywhere is that the days when inflation figures were only driven by commodity prices (oil) are over. Second round effects have already kicked in. This is real inflation and central bankers are adapting their policies. The only thing that will avoid further increases is weak economic data. So it seems that we arrived at the crossing point. Weak economy = no interest rate increase but weak housing market. Decent or strong economy = interest rate increase and weak housing market. The party is over, soon the mess will have to be cleaned up. I am just grateful that I didn't join this party.
  6. What are you guys talkin about??? The ten year fixed rate looks good because the UK yield curve is massively inverted and the cost of borrowing for the long term is very low. Mortgage lenders are not betting on anaything at all. Their exposure to changes in interest rates is hedged. Please remember that changes in house prices do not lag (follow) but lead changes in interest rates. If rates drop this doesn't necessarly mean further HPI, after all, rates were lower a few years ago and yet prices continued to rise. What has been driving the market since 2003 is price momentum (speculation). When people will realise that the asset class is dead (better returns elsewhere) they will exit the market. Fear will replace greed and (independently of interest rate increases or decresase) prices will fall.
  7. Is it really true that landlords can keep the interest earned on your deposit? I am about to move and will ask my landlord for the deposit and the interest rate. Unfortunately I could not find any information that states that landlords have to pay interest on the deposit. Can anyone help?
  8. Once again the immigration card is played by a few posters. Brainclamp has been going on and on about this for months but has never been able to demonstrate a clear link between HPI and immigration (maybe someone else can?). You need to be coherent. If wages are under pressure because of the inflow of immigrants surely this is negative for HPI. When people start arguing that immigrant construction workers will drive down interest rates to such an extent that HPI will resume the level of the debate really reaches very low levels.... Stop blaming groups of people or the government for HPI. This is a global phenomenon and momentum in prices has been the driver of irrational HPI over the last years. Now that volumes are low and prices are not rising anymore, property as an asset class will lose its interest regardless of net immigration flows.
  9. Thanks for the update. I also believe that the chart should be updated but your new chart certainly doesn't tell a very different story. Do you think that it suggests that the worst is over? If yes, why? It is funny to see that the only contribution that property investors can do these days is to focus on such irrelevant things (running out of arguments maybe?).
  10. After the program on the best and worst places to buy property in the UK (C4 a few months ago) I thought that we had reached the absolute lowest possible level of financial misinformation. This latest show shows that there are no limits to the irresponsibility and unprofessional behavior of C4 and co. I work in finance and am very aware of the care we all have to use when we recommend investment and present past and forecasted performances. I am extremely pro-market and against over-regulation, however this kind of programs makes me believe that the FSA or another authority should have the power to prevent these unacceptable investment recommendations. Anyway, isn’t it funny that you now have to go abroad to make $$$ in the property market? Forget the bulls**t , this time the crash is coming for real….
  11. As far as I can remember you have never been right.... Have you had some time to find any evidence at all that "mass" immigration caused the recent HPI? Probably not....
  12. I agree with Vacant Possession. Brainclamp has been keeping on posting comments linking HPI with immigration but has never been able to show convincing evidence. I start to think that the only reason why he is posting on this site is because he believes that a lot of viewers are frustrated/desperate and can easily be convinced to blame foreigners. Is Brainclamp trying to recrute voters?
  13. This time there is a significant difference: inflation is much lower. How will this affect the correction/crash? Do you HPCs believe that lower inflation means higher price volatility (in the sense that all the adjustements will have to be carried through higher nominal price drops)? = FASTER CRASH of nominal prices Or does this mean that interest rates will remain low and therefore the correction will take even longer (i.e. no forced sellers)? = LONGER ADJUSTEMENT PERIOD. I am still trying to figure this out...
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