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Recession Makes Grownup Man Cry

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I use to think that the recession is still far away until I meet my friend Rick last week.

Rick and I were friends since the University. We were flat mates for two years, joined same sport team and really close. After that, he trained and worked in law firm in London.

Rick qualified as a solicitor and lived in a luxury two bed room flat in east London. I use to stay there during holidays and jealous about his life style.

He bought the flat from his landlord in late 2006 at £295,000 with an interest only, 100% mortgage. His monthly payment for the mortgage was far less than the rent and, in a few years time he can even make a profit if the house price keeps rising.

The house price downturn starts in his area in 2008 and he was bit concerned but not really worried. Back then, he was even joking that the low interest rate would be good for him.

Last month, he was made redundant. He did not see this coming and was totally shocked by the news. The job hunting did not go well and he could not find a job with decent salary to support the mortgage payment.

I saw him last week and the man was stressed. At the moment his insurance are covering the mortgage payment and will continue to do so for a year. He tried to rent one room out but could not find anyone. He tried to sell the flat and no offers were made. He said he does not know what to do if he could not find a job. He does not want bankruptcy as it will kill his career.

I hope he can get a job ASAP and get out the mess he is in. It was awful.

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I use to think that the recession is still far away until I meet my friend Rick last week.

Rick and I were friends since the University. We were flat mates for two years, joined same sport team and really close. After that, he trained and worked in law firm in London.

Rick qualified as a solicitor and lived in a luxury two bed room flat in east London. I use to stay there during holidays and jealous about his life style.

He bought the flat from his landlord in late 2006 at £295,000 with an interest only, 100% mortgage. His monthly payment for the mortgage was far less than the rent and, in a few years time he can even make a profit if the house price keeps rising.

The house price downturn starts in his area in 2008 and he was bit concerned but not really worried. Back then, he was even joking that the low interest rate would be good for him.

Last month, he was made redundant. He did not see this coming and was totally shocked by the news. The job hunting did not go well and he could not find a job with decent salary to support the mortgage payment.

I saw him last week and the man was stressed. At the moment his insurance are covering the mortgage payment and will continue to do so for a year. He tried to rent one room out but could not find anyone. He tried to sell the flat and no offers were made. He said he does not know what to do if he could not find a job. He does not want bankruptcy as it will kill his career.

I hope he can get a job ASAP and get out the mess he is in. It was awful.

Sorry to hear that - it's bad news. Sounds like someone who works hard and just wanted to own their own place rather than make easy money from property. At least he has that insurance - so it transpires he is a wise man for taking it out (and choosing one that would pay out).

The classic option is to move in with the parents and rent the place out. I'm not in favour of accidental landlords myself, but it might be a good thing for him as it has been forced upon him.

Out of interest, did he suspect a HPC when he bought it? What made him go IO?

Unfortunately his flat probably is now worth £150k :unsure:

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If he goes bankrupt, can he work as a solictitor in the future?

VMR.

No is the short answer and why would he ? Unless he has lots of other debt he needs to pull himself together, he has over a year to get another job and sort himself out.

Some people just need a kick up the ****, he will find another job, this isn't the end of the world.

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So lets get this straight. If he didn't have a big mortgage to worry about, he would probably be ok. Is that what you are getting at.

Ah well, should have thought about that. Well, you know what they say,, rent is dead money and all that :lol: .

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If he goes bankrupt, can he work as a solictitor in the future?

VMR.

As far as I am aware you are automatically suspended. The Law Society will then look at each individually.

This was lifted from the Law Society Website...

The draft Guidelines state that the SRA will not have confidence that the applicant is able to manage his or her own and clients’ affairs, unless there are exceptional circumstances, if the applicant has been made bankrupt, has entered into individual voluntary arrangement or has unmanageable debts arising from the applicant’s recklessness, incompetence or dishonesty; the applicant has deliberately sought to avoid responsibility for their debts; there is evidence of dishonesty in relation to the management of finances.

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Guest sillybear2

I think the same rules still apply to the police? I guess the Law Society not only see bankruptcy as bad form but potentially opening members up to corruption, people do reckless things if they're desperate for money. A bankrupt lawyer might not automatically mean a crooked lawyer, but I'm sure the odds go up a lot.

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he lost his job last month (december) and since then he hasn't found another job, hasn't been able to get a lodger and nobody has bought his place and so he's given up hope. This story doesn't make sense, who would hope to get any of those things in the space of a few weeks over christmas??

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I use to think that the recession is still far away until I meet my friend Rick last week.

Rick and I were friends since the University. We were flat mates for two years, joined same sport team and really close. After that, he trained and worked in law firm in London.

Rick qualified as a solicitor and lived in a luxury two bed room flat in east London. I use to stay there during holidays and jealous about his life style.

He bought the flat from his landlord in late 2006 at £295,000 with an interest only, 100% mortgage. His monthly payment for the mortgage was far less than the rent and, in a few years time he can even make a profit if the house price keeps rising.

The house price downturn starts in his area in 2008 and he was bit concerned but not really worried. Back then, he was even joking that the low interest rate would be good for him.

Last month, he was made redundant. He did not see this coming and was totally shocked by the news. The job hunting did not go well and he could not find a job with decent salary to support the mortgage payment.

I saw him last week and the man was stressed. At the moment his insurance are covering the mortgage payment and will continue to do so for a year. He tried to rent one room out but could not find anyone. He tried to sell the flat and no offers were made. He said he does not know what to do if he could not find a job. He does not want bankruptcy as it will kill his career.

I hope he can get a job ASAP and get out the mess he is in. It was awful.

If you read this in your mind using a Morgan Freeman Shawshank Redemption monologue voice it is very moving. :blink:

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Guest sillybear2
he lost his job last month (december) and since then he hasn't found another job, hasn't been able to get a lodger and nobody has bought his place and so he's given up hope. This story doesn't make sense, who would hope to get any of those things in the space of a few weeks over christmas??

:lol: I agree, members need to sharpen up their sophistry skills, another victim of the recession, it seems.

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he lost his job last month (december) and since then he hasn't found another job, hasn't been able to get a lodger and nobody has bought his place and so he's given up hope. This story doesn't make sense, who would hope to get any of those things in the space of a few weeks over christmas??

Exactly, my husband finished on the 21st November, hass had his feet up throughout December and the interviews are just coming through starting next week.

Bit early to start thread the noose for goodness sake (his mate not my husband)

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Guest sillybear2
Exactly, my husband finished on the 21st November, hass had his feet up throughout December and the interviews are just coming through starting next week.

Bit early to start thread the noose for goodness sake (his mate not my husband)

Good luck with the interviews, another month and he'll turn into Rab C Nesbitt ;)

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Good luck with the interviews, another month and he'll turn into Rab C Nesbitt ;)

Oh don't I'm already making him do the school run so he sees daylight once per day at least.

He has become extremely good at chess though, so if the worse comes to the worse I'm hoping to sell him to Russia as a grand master.

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If he goes bankrupt, can he work as a solictitor in the future?

VMR.

This is irony at its best :

1. Man decides to make a better life for himself.

2. Man goes to University and is saddled with a lot of student debt.

3. man trains to be a Solicitor and wants to buy a flat.

4. The fecklessness of the banks and the system fail the man, causing him not only to lose his home, but his job as well.

5. Man should sign on dole forever and get a free flat, housing benefit and council tax rebate, while resigning oneself to watching daytime TV and relaxing at the serfs who are next.

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interest only mortgages should be banned in the post-HPC new world order.

they make no sense whatsoever.

Lets think about that one. An Intrest Only Mortgage, is where you get a mortgage to live in a house which is owned by the bank. You pay every month money to the bank to live in it, but you never actually own the property, you are merely paying off the interest. In effect you are renting the property from the banking.

I catagories this scenario as "System Causaility Failure". (I like making up proper nouns).

It is where a system or product is designed to fail, and it will fail sooner or later. However until it fails, the bank collect interest and own the property 100%. When the poor mortgagee cannot pay any longer or comes to the end of the mortgage the bank simply reposseses the property or the system starts all over again.

I agree upon reflection with "The Flying Pig". This type of mortgage should be banned in our new world order.

Edited by pinbacker

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The Flying Pig...

"interest only mortgages should be banned in the post-HPC new world order.

they make no sense whatsoever"

Sorry mate, but you are wrong.

Interest only mortgages do make sense in many cases. Anyone with a guaranteed lump sum in the future such as an inheritance or trust fund could take out an interest only mortgage without any worries. Also, it would make sense for recipients of a lump sum from a pension or endowment to consider an interest only mortgage. Obviously they would need to keep a careful eye on the lump sum from these schemes, especially in the current climate.

Pension mortgages were popular in the eighties because not only did the borrower receive full tax relief on their contributions but also the fund was tax free. Plus, of course, there was a tax free lump sum available as an option upon retirement. Unfortunately, since our Lunatic Dear Leader start taxing the dividend credits of pension schemes, pension funds have dropped in value. Read on, especially Labour Trolls like Pat the Prat Primer...

http://www.thisismoney.co.uk/news/columnis..._author_id=2025

However, quite a few low cost endowments have been amended to include a guarantee on the final maturity amount. This has usually happened when the policyholder has received a warning traffic light letter on future bonuses and then asked to increase their monthly contribution substantially.

I do not think interest only mortgages will ever be banned. They will however carry much stricter warnings and safeguards for the borrower.

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He bought the flat from his landlord in late 2006 at £295,000 with an interest only, 100% mortgage. His monthly payment for the mortgage was far less than the rent and, in a few years time he can even make a profit if the house price keeps rising.

Did you persuade him to buy his flat in 2006?

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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