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Reposessions Are Good

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  1. Reposessions help drive house prices down
  2. Thus improving affordability for everyone
  3. Especially hard-working first-time buyers
  4. But also the repossessed themselves
  5. Who, by going bankrupt, lose the burden of crippling debt
  6. ... and can buy again at a more reasonable price after perhaps three years

The only losers are those sitting on an unearned fortune. Oh, and the mortgage lenders, but it's not in their interests to prolong their pain, either.

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  1. Reposessions help drive house prices down

  2. Thus improving affordability for everyone

  3. Especially hard-working first-time buyers

  4. But also the repossessed themselves

  5. Who, by going bankrupt, lose the burden of crippling debt

  6. ... and can buy again at a more reasonable price after perhaps three years

The only losers are those sitting on an unearned fortune. Oh, and the mortgage lenders, but it's not in their interests to prolong their pain, either.

The burden of the debt remains for the rest of your life even if you go bankrupt. As soon as you are in the money again the banks will come knocking. Your credit rating is ruined and you will not get a mortgage for a very long time. Your family gets punted out of their home and goes through hell. Definitely not good for the repossessee.

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Guest sillybear2
The burden of the debt remains for the rest of your life even if you go bankrupt

The debt remains, but you've lost your hedge for that debt.

Not good for the individuals concerned.

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What about the lost funds?

Where does that money go?

Who ends up paying for it?

Does it just vanish into thin air?

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Lets get it straight here. Denying somebody a loan, or 'credit', is a good thing. People being forced to live within their means, however humble, is a good thing. Working hard and saving for something is a good thing.

Lending followed by default is bad. Emotive credit fuelled shopping is very bad. Banks WILL make up that money somewhere else. Like charging me more because some FU€KUP has decided to take a huge personal risk.

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You sir, are one of the many whose unrealistic and simplistic view of our economy gets us all in trouble.

Edited by cashinmattress

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the OP is over-egging the argument somewhat... reposessions aren't good for everyone, certainly if i was at risk i'm sure i'd be fighting it unless the situation was hopeless.

but, yeah, good can come out of it. get things moving again, more sales, which means more tax receipts, more people moving around, doing bits of DIY, and so on & so on.

the key argument for me, though, is just that the alternative to reposessions is completely unacceptable - a reposessed house it the property of whichever bank we're talking about, if it's in that bank's interest to reposess & sell the house then who is going to compensate in return for doing something that's not in their interest? and who's going to pay for that compensation? for the answer to the second question to be 'the taxpayer' would just not be on, bad news from a budgetary, incentives, and fairness perspective, just a disgrace.

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The burden of the debt remains for the rest of your life even if you go bankrupt.[/b] As soon as you are in the money again the banks will come knocking. Your credit rating is ruined and you will not get a mortgage for a very long time. Your family gets punted out of their home and goes through hell. Definitely not good for the repossessee.

if you declare yourself bankrupt the bank or B/S cant chase you for any debts, the bankruptcy will only last 12 months and all debts are written off, you may well have to continue a payment plan for 36 months from the b/r date....

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Doesnt a repossesion or bankruptcy stay on your credit rating for like 10 or 11 years?

And make you unlikely to ever get a private rental, ineligible for/unlikely to get, a lot of jobs, etc etc etc, for that time frame at least?

So all that happens is you get repo'd, become homeless, declare bankruptcy, get stripped of all your remaining assets, have to pay off a big chunk of the debt over 3 years anyway, the balance gets written off, the banks/mortgage issuers lose a lot their money too (in this current market), and then you have to be housed at taxpayer expense (homeless family), most likely in Bed and Breakfasts at £30 per person per day for months/years, (at taxpayers bl00dy expense) as the council have waiting lists of tens/hundreds of thousands.

And this is good for anyone how?

Bankrupt/repo'd individual loses big time.

Taxpayers (you and I) lose.

Banks lose.

Other homeless/more needy people lose.

Seems a ridiculously high price for society to pay, just so you can get a cheap house at auction. Actually, scratch that, most of you won't be buying these houses cheap at auction as it's too hard to arrange a mortgage for them.

Seems a ridiculously high price for society to pay so a property speculator or professional BTL'r can buy a cheap house at auction. Cause thats who ends up buying most of them. :rolleyes:

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The burden of the debt remains for the rest of your life even if you go bankrupt. As soon as you are in the money again the banks will come knocking. Your credit rating is ruined and you will not get a mortgage for a very long time. Your family gets punted out of their home and goes through hell. Definitely not good for the repossessee.

This is not my understanding of bankruptcy.

Bankruptcy is one way of dealing with debts you cannot pay. The bankruptcy proceedings:

- free you from overwhelming debts so you can make a fresh start, subject to some restrictions; and

- make sure your assets are shared out fairly among your creditors.

If you're simply repossessed, they can indeed chase you (subject to certain time limits, I believe). If you're also declared bankrupt, you start again with an impaired credit record but a fresh balance sheet.

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What about the lost funds?

Where does that money go?

Who ends up paying for it?

Does it just vanish into thin air?

The "lost funds" are money that never actually existed: we're printing it into existence now (google "quantitative easing"). The loss of those funds are precisely why we're rescuing the banks. Repossession is in that context a damage-limitation exercise.

OK, I should have qualified my statement. Repossession is per se a Bad Thing. But it is merely an effect of the bubble. From where we are now, repossession where appropriate is the least bad option.

------------------------------------------------------------------------------------------------------------------------------------------

Lets get it straight here. Denying somebody a loan, or 'credit', is a good thing. People being forced to live within their means, however humble, is a good thing. Working hard and saving for something is a good thing.

Lending followed by default is bad. Emotive credit fuelled shopping is very bad. Banks WILL make up that money somewhere else. Like charging me more because some FU€KUP has decided to take a huge personal risk.

------------------------------------------------------------------------------------------------------------------------------------------

The ******up has already happened. We can't change that.

But we should stop making it worse. That includes NOT pouring good money after bad.

You sir, are one of the many whose unrealistic and simplistic view of our economy gets us all in trouble.

Charmed, I'm sure. Guess you'd rather I'd taken out a huge Northern Rock mortgage then come bleating to the taxpayer.

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Doesnt a repossesion or bankruptcy stay on your credit rating for like 10 or 11 years?

I think its 6 but you will get credit before it is fully discharged ESPECIALLY IF MANY OTHER PEOPLE ALSO HAVE IT ON THEIR RECORDS. Banks need to lend to make money, if 100% of the population were bankrupts do you think bankruptcy would be the main barrier to getting credit

And make you unlikely to ever get a private rental, ineligible for/unlikely to get, a lot of jobs, etc etc etc, for that time frame at least?

Few jobs bar or require disclosure of bankruptcy.

So all that happens is you get repo'd, become homeless, declare bankruptcy, get stripped of all your remaining assets, At the point of going bankrupt you have no other real assets anyway assuming you have prioritised the mortgage.[/b] have to pay off a big chunk of the debt over 3 years anyway, the balance gets written off, the banks/mortgage issuers lose a lot their money too (in this current market), and then you have to be housed at taxpayer expense (homeless family), most likely in Bed and Breakfasts at £30 per person per day for months/years, (at taxpayers bl00dy expense) as the council have waiting lists of tens/hundreds of thousands. You think houses will vanish and taxpayers will build new ones to house people?

And this is good for anyone how? Becuase houses will be massively cheaper and someone who can afford them will get the chance to buy instead. I go fricken insane listening to that moron brown saying that he wants people to be able to get mortages. I don't want a mortgage I want a house, i would be quite happy if mortages were made illegal tomorrow. How much would a house be worth then?

Bankrupt/repo'd individual loses big time. [b]Lost what? A massively depreciating millstone? Most of the people being repossed will be those who have bought in the last few years and who despite what they have paid in are already "under water" as the americans put it. What have people like that lost really?

Taxpayers (you and I) lose. Not a fait accompli

Banks lose. No biggie

Other homeless/more needy people lose. why?

Seems a ridiculously high price for society to pay, just so you can get a cheap house at auction. Actually, scratch that, most of you won't be buying these houses cheap at auction as it's too hard to arrange a mortgage for them. For now

Seems a ridiculously high price for society to pay so a property speculator or professional BTL'r can buy a cheap house at auction. Cause thats who ends up buying most of them. :rolleyes:

The OP's post is an extreme end of the scale of one side of the argument but s/he is mostly corrrect.

.

ST

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my understanding>

when bankrupted you become insolvent for a period of time 2-4 years or whatever during which time youre not supposed to leave the country, have huge assets etc

during that time if you come into money it can be taken by the government

but you will be protected from anyone else that wants to collect from you

any threatening letters phone calls etc can be reported to the insolvency office

you will get credit for nothing during this time but surely the removal of a burden of huge debt is worth it?

those who have fallen into a debt spiral ie- using credit cards to pay other cards just keeping above the breadline or whatever, or involving illness

will be viewed more sympathetically than those who turn up with a bunch of receipts for 4x4s , boats , foreign holidays etc

when the period of insolvency is passed, youre clear- no-one should be able to chase you for a debt you declared before bankruptsy

but the chances of getting a mortgage within 10-12 years are pretty bloody slim

your credit rating will be in the toilet, but you'll have a fresh start

if anything personal bankruptsy is there to protect people

if it happens a second time or if it looks like a career in debt consumption they won't go so easy on you

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  1. Reposessions help drive house prices down

  2. Thus improving affordability for everyone

  3. Especially hard-working first-time buyers

  4. But also the repossessed themselves

  5. Who, by going bankrupt, lose the burden of crippling debt

  6. ... and can buy again at a more reasonable price after perhaps three years

The only losers are those sitting on an unearned fortune. Oh, and the mortgage lenders, but it's not in their interests to prolong their pain, either.

But most of all they help to recapitalize the banks, repossessions that is. Not only this you also find out which people

were doing well and which people just thought they were donig well.

Edited by time 2 raise interest rates

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But most of all they help to recapitalize the banks, repossessions that is. Not only this you also find out which people

were doing well and which people just thought they were donig well.

Well, they limit the self-inflicted damage to banks. Which seems particularly relevant just now.

Perhaps it's also time to stop hounding lenders who try to sell insurance alongside a mortgage. For those who get into difficulty through no fault of their own, insurance should be the solution. Yet the govt has spent years telling us (and the banks) it's anti-competitive to tie insurance to a loan. Sure, there's a case for having separate products, but that shouldn't preclude bundled products, nor should it preclude a lender offering preferential rates to someone who takes out insurance.

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QUOTE (niq @ Jan 24 2009, 02:26 PM)

Repossessions help drive house prices down

Thus improving affordability for everyone

Especially hard-working first-time buyers

But also the repossessed themselves

Who, by going bankrupt, lose the burden of crippling debt

... and can buy again at a more reasonable price after perhaps three years

The only losers are those sitting on an unearned fortune. Oh, and the mortgage lenders, but it's not in their interests to prolong their pain, either.

Repossessions do drive down house prices. And that is good for everybody in the long run. In the short term however, in these circumstances repossessions could be handled a different way.

Presently a repo will go to market fairly quickly,It will be empty with no heating, maintenance not done and garden overgrown. At the minute the banks are not accepting low offers on them in the hope of larger returns in the future.

These houses are left to deteriorate, making them less likely to sell, harder to mortgage and is quite simply a complete waste of a home.

The original "owners" have now moved on, there is no social housing anymore so they move into BTL properties. This keeps the LL in business, keeping their houses on the market.

Chances are considering that this person/people had their house repossessed that they are now on benefits.

Repossession shortfalls can be and will be chased by the DC's. Lenders can chase the capital balance for 12 years and the interest for 6 years. Credit files will be marked for 6 years.

From 2000 - 2008 mortgages were available to people with adverse credit files, previous repossessions & mortgage arrears. That was part of the original problem!

Its not happening now.

Very few people who get repo'd actually go BR so there is usually more debt.

So now we have the gov using tax payers money to pay the BTL LL's (these are the guys who helped HPI to a much greater extent than your average buyers looking for a home)

For some unexplainable reason that is seen by some on this forum as preferable to Gordon working out some sort of purchase agreement with the lenders to buy the repo houses. Keeping people in their homes, kids at their own schools. They become tenants with standard tenants rights and the gov gets a good quality social housing for the future.

Considering the unique relationship between the banks, the tax payer and the gov, there are other financial options that could /should be investigated.

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niq

I agree about the protection insurance, not that it should be tied to loans but that it should be compulsory. The insurers need to standardise the policies tho and come up with some decent products for self employed people.

Tighter regulations to stop useless policies being written be needed.

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niq

I agree about the protection insurance, not that it should be tied to loans but that it should be compulsory. The insurers need to standardise the policies tho and come up with some decent products for self employed people.

Tighter regulations to stop useless policies being written be needed.

Totally agree, the policy we were offered and declined would pay out after 90 days providing you'd been made redundant, if you took redundancy there was a no pay out clause, however I know several people who have chosen redundnacy because it was the only way they could bank on being paid, if they wait to be made redundant they would have been last on the list and got nothing including wages/holiday owed.

As for reposessions being good, i simply cannot imagine the emotional impact on anybody loosing their home and I would have literally done anything to avoid it if ever in that situation. People who are reposessed must be in a very bad place because from what I can see/read even bankruptsy doesn't always mean the home is lost.

Edited by Girly girl

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The burden of the debt remains for the rest of your life even if you go bankrupt. As soon as you are in the money again the banks will come knocking. Your credit rating is ruined and you will not get a mortgage for a very long time. Your family gets punted out of their home and goes through hell. Definitely not good for the repossessee.

I don't know where you got this from; but unless my memories of Insolvency Law are a LOT dodgier than I think they are, you are mistaken. There are a FEW debts you can't bankrupt your way out of - Student loans and some maintenance / alimony debts spring to mind - but pretty much everything else is wiped out. True, your credit is screwed for at least 6 years but at at least you are no longer being hounded day and night.

Edited by cartimandua51

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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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