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Lloyds: Fifth Of Mortgage Customers In Negative Equity

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Lloyds: fifth of mortgage customers in negative equity

A fifth of Lloyds Banking Group mortgage customers were in negative equity at the end of June, figures from the bank revealed today.

Halifax owner Lloyds said falling house prices were to blame for the figure, although high loan-to-value mortgages would have left homeowners at greater risk of owing more than their property was worth.

Lloyds said total mortgage lending by its high street business was £18.3 billion in the first half of the year, nearly 60% less than the figure in the same period last year.

The firm said the overall mortgage market for both house purchase and re-mortgage had "slowed considerably" with a 55% drop in lending as low interest rates on lenders' standard variable rates dissuade home owners from looking for new deals.

The proportion of customers in negative equity jumped to 20.4% by June 30, from 16.2% in December.

The lender also revised its predictions for house price falls today to 7% or less during 2009, from an initial 15% forecast.

A spokeswoman for Lloyds said neither of the main Lloyds TSB or Halifax lending businesses had ever offered more than 100% mortgages, although she said the Birmingham Midshires arm had offered a 125% deal that was withdrawn from the market last February.

Within the figures, almost a third of buy-to-let mortgages and 25.9% of specialist loans - which include controversial self-certified and sub-prime deals - were in negative equity.

The UK's largest lender also said the rate of mortgage defaults rose in the period, with 2.44% of loans more than three months in arrears compared with 1.79% in December.

Lloyds said 1.1% of those who owed more than their home was worth were more than three months in arrears.

Across the whole high street business - including personal loans and credit cards - bad debt charges rose 60% on last year, to £2.2 billion, due to rising unemployment and falling house prices.

Lloyds said the increase in joblessness this year means it expects a moderate rise in bad debt charges in the second half of the year for the division, which should represent the peak of its impairments.

The bank stopped all sub-prime and self certified mortgages at the beginning of the year and said it would now focus on prime lending.

Around 80,000 mortgages - or 2.44% of the whole portfolio - were in arrears.

Of these, Lloyds said around 3% of the buy-to-let loans it had inherited from HBOS were in default. This compares with 0.73% of buy to let mortgage accounts from Lloyds TSB.

The firm said its high street arm had "maintained its commitment to the housing market", by allocating more than 50% of new lending in the first half for house purchase rather than for re-mortgage.

The bank said its share of gross lending in the mortgage market had reduced to 27% from 30% last year.

Net mortgage lending in the period - which strips out repayments and redemptions - was £1 billion, representing a 37% share of the market.

Lloyds has committed to lending £28 billion in mortgages and business loans over the next two years.

It has also identified £300 billion of risky assets - about a third of the group's total balance sheet - and will run off £200 billion in the next five years. It said about £100 billion will be used for business and household lending.

The bank said its wholesale division "fully embraces its role in supporting the recovery in the UK economy" and would support businesses.

It said lending to small businesses was ahead year-on-year in Lloyds TSB and Bank of Scotland was reopened to new lending, while 60,000 new commercial accounts were opened.

Total loans and advances to customers in its wholesale division slid 8% to £216.4 billion.

Impaired loans increased by 72% to £31.7 billion, while losses on bad debts rocketed more than 800% to £8.3 billion.

The firm added that its small business portfolio was "showing signs of stress", but said that was to be expected at this stage in the recession.

That's one heck of a lot of people who cannot have any more MEW fun for a long, long time.

Meh.

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That's one heck of a lot of people who cannot have any more MEW fun for a long, long time.

Meh.

Not to worry, they'll be flooding MSE soon exploring their options to take legal action against...someone! The sheeple will never accept that they are in NE...NE is something that happened to their ancestors back in the 80s and, like the evil Tories, was wiped out by Blair n Broon in 1997 and onwards!

Imagine that eh? Under a Tory govt and in NE...Talk about Total Recall! LOL BRING IT ON!!!!

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....

Thats 20% of mortgaged property owners feeling ripped off
...they have ripped themselves off....the people who have been ripped off are the Lloyds shareholders and the staff who are losing their jobs due to a deal to offload the HBOS time bomb on to them ..... <_<

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.......they have ripped themselves off....the people who have been ripped off are the Lloyds shareholders and the staff who are losing their jobs due to a deal to offload the HBOS time bomb on to them ..... <_<

And the guy who cooked up the toxic broth

thinking that stocking sheleves at Asda is all you need to know to run mortgages at Halifax

is soon to be filling his boots once again as CEO of Alliance Boots - corporate appointment committees are never short of idiots

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If this is repeated across the piece then this is huge - that means that 20% of the homeowning population are stuck, and if they lose their jobs a good proportion are probably bust. You can forget your Haliwide index rising by 1% if unemployment starts creeping again up in the autumn ............

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Negative equity is not a big problem while interest rates are so low.

When you are only paying between 0% and 3.5% on your mortgage.

It is still cheaper to service the mortgage interest than go into rented.

Even those on higher rate fixes will be coming off to nice 3.5% SVRs.

Interest rates are not going up anytime soon.

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Negative equity is not a big problem while interest rates are so low.

When you are only paying between 0% and 3.5% on your mortgage.

It is still cheaper to service the mortgage interest than go into rented.

Even those on higher rate fixes will be coming off to nice 3.5% SVRs.

Interest rates are not going up anytime soon.

But you won't be getting those juicy rates if you are in neg eq?

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is soon to be filling his boots once again as CEO of Alliance Boots - corporate appointment committees are never short of idiots

Yes Andy Hornby should be bankrupt, and a struck off Director by now, and languishing in Ford Open Prison.

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Negative equity is not a big problem while interest rates are so low.

When you are only paying between 0% and 3.5% on your mortgage.

It is still cheaper to service the mortgage interest than go into rented.

Even those on higher rate fixes will be coming off to nice 3.5% SVRs.

Interest rates are not going up anytime soon.

Agreed. Not a problem until you can't service the debt at all because you are out of work. Or you are divorcing (or marrying/shacking up in some situations). Or your employer asks you to relocate. Or you want to move for a new/better job. Or your current mortgage provider decides to rebuild its balance sheet on the back of your earnings and you find he has you over a barrel on his SVR (which is what has happened at NR and explains their delinquency rates).

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Yes Andy Hornby should be bankrupt, and a struck off Director by now, and languishing in Ford Open Prison.

Andy Hornby? Isn't he still being paid 60K a month as a consultant for Lloyds?

Not bad for a 38-year old shelf-stacker.

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Andy Hornby? Isn't he still being paid 60K a month as a consultant for Lloyds?

Not bad for a 38-year old shelf-stacker.

The real crook in the HBOS scandal was "Sir" James Crosby [Knighted by fudgepacker G Brown].

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Agreed. Not a problem until you can't service the debt at all because you are out of work. Or you are divorcing (or marrying/shacking up in some situations). Or your employer asks you to relocate. Or you want to move for a new/better job. Or your current mortgage provider decides to rebuild its balance sheet on the back of your earnings and you find he has you over a barrel on his SVR (which is what has happened at NR and explains their delinquency rates).

NR were merely using Liar Loans to pump up house prices. It was a complete con job. End of.

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NR were merely using Liar Loans to pump up house prices. It was a complete con job. End of.

Don't disagree with you Eric, but where they are now is that the only remaining NR customers will be those who cannot move elsewhere because their house is worth less than the loan, liar loan or otherwise; that will send their delinquency rates into the stratosphere.

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NR were merely using Liar Loans to pump up house prices. It was a complete con job. End of.

I posted an anecdotal that I heard over the weekend, Eric....(ITs over on the anecdotals forum). Advice from a C&G mortgage advisor / seller re one of their own products to the owner occupier of a property that was subsequently rented out:

Don't tell us about it or you won't get such a good rate on you IO mortgage. (My interpretation of what was said)

No wonder Lloyds are in the poo if this is / was the attitude of their own staff. I guess it is part of the sell, sell, sell retail banking culture that we have lived with for some time now.

It can only end in tears.

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Andy Hornby? Isn't he still being paid 60K a month as a consultant for Lloyds?

Not bad for a 38-year old shelf-stacker.

He's 42 according to wiki.

Baliol and Harvard.

Masters in Hubris apparently.

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I posted an anecdotal that I heard over the weekend, Eric....(ITs over on the anecdotals forum). Advice from a C&G mortgage advisor / seller re one of their own products to the owner occupier of a property that was subsequently rented out:

Don't tell us about it or you won't get such a good rate on you IO mortgage. (My interpretation of what was said)

No wonder Lloyds are in the poo if this is / was the attitude of their own staff. I guess it is part of the sell, sell, sell retail banking culture that we have lived with for some time now.

It can only end in tears.

My last mortgage was with C&G. I rented the place out when I was posted to the States and told them. No impact at all on the rate (it was repayment though and not IO)

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My last mortgage was with C&G. I rented the place out when I was posted to the States and told them. No impact at all on the rate (it was repayment though and not IO)

They have been trying to MEW for a new car but would lose their current deal if they come clean......... Made my weekend in a 5 minute discovery...IO mortgage, MEW and non disclosure of letting on an OO mortgage. He wanted to sell in 2007, but she wouldn't let him as it had dropped by £5/10K from peak!!!!!!

I thought you only heard of such ridiculous stories on HPC and then on Saturday I discovered my Brother in Law was a prime case! :ph34r:

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They have been trying to MEW for a new car but would lose their current deal if they come clean......... Made my weekend in a 5 minute discovery...IO mortgage, MEW and non disclosure of letting on an OO mortgage. He wanted to sell in 2007, but she wouldn't let him as it had dropped by £5/10K from peak!!!!!!

I thought you only heard of such ridiculous stories on HPC and then on Saturday I discovered my Brother in Law was a prime case! :ph34r:

This is going on every day all over the place.......

Dishonesty and Desperation are the way of life nowadays..... Done without the bat of an eyelid.....

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My last mortgage was with C&G. I rented the place out when I was posted to the States and told them. No impact at all on the rate (it was repayment though and not IO)

They used to not allow this...

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They used to not allow this...

That's not what they told me, and this was in 1996. I went to the branch and explained that I had been posted to the states and intended renting the house out. They said, fine, happens all the time, and other than insisting that I gave them a copy of the buildings insurance policy mentioning their interest, and gas certificate and sending them the renewals every year, they were fine with it.

I was quite surprised because I was on a 5 year fix at a brilliant rate with a 5% penalty if repaid within 5 years and I was fully expecting them to stiff me onto their SVR and invoke the penalty (I had warned my eer that this would happen and they had indemnified me) but they were very understanding.

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