Jump to content
House Price Crash Forum
eric pebble

Prime Arrears On The Rise

Recommended Posts

PRIME ARREARS ON THE RISE

The number of prime borrowers in three-month arrears has continued to rise as Moody’s warns that arrears on prime mortgages are set to deteriorate.

Arrears of more than 90 days on prime residential mortgage-backed securities have doubled from the level recorded by the Moody’s index last year, going from 0.9% in Q2 2008 to 1.8% in Q2 this year.

http://www.mortgagestrategy.co.uk/cgi-bin/...h=401&f=402

No surprises there, of course........ Countless thousands and thousands of people were urged/stupid enough to take out utterly absurd, ridiculous mortgages........ Little surprise they've come a cropper.

:rolleyes::rolleyes:

Share this post


Link to post
Share on other sites
The dearth of the remortgage market, together with the rise in unemployment, means that prime borrowers will find it increasingly difficult to meet their mortgage payments, Moody’s says.

I'm glad these experts are on the case, I have no idea how they have managed to figure our increasing unemployment may make it difficult for people to make mortgage payments.

Do they have PHD's in economics?

If we are still in recovery by Q1 of 2010 I'll be amazed.

Share this post


Link to post
Share on other sites
Where's Bail out man when you need him?

He's gone to get a bigger bucket.

Share this post


Link to post
Share on other sites

recipe for recoveh

take 10m Prime cut of arrears

mix with 10m puree of credit card arrears

add the 10m of business loan defaults

boil in the reserve pan for 2 months.

stir your politicians, then add in government debt rollovers, stirring with MSM all the time.

Bring back to the boil, now sprinkle in the Corporate rollovers and a sprig of bernankes beard.

serve to public with nice faced ethnic president and watch your stock rise.

Share this post


Link to post
Share on other sites

There's a very simple explanation for the jump in monthly arrears.

Many borrowers are on trackers or discounted variable rates linked to the lenders SVR.

Take someone on a IO tracker paying 1% above BoE base. Say his payments were £1000 per month last year when BoE base was 5%. He gets 2 month behind with his repayments so he owes £2000.

This year he's only paying 1.5% and his repayments are down to £200 per month. This has helped him reduce what he owes to £1000.

But, because his repayments are now only £200 per month, he is therefore 5 months in arrears.

Share this post


Link to post
Share on other sites
There's a very simple explanation for the jump in monthly arrears.

Many borrowers are on trackers or discounted variable rates linked to the lenders SVR.

Take someone on a IO tracker paying 1% above BoE base. Say his payments were £1000 per month last year when BoE base was 5%. He gets 2 month behind with his repayments so he owes £2000.

This year he's only paying 1.5% and his repayments are down to £200 per month. This has helped him reduce what he owes to £1000.

But, because his repayments are now only £200 per month, he is therefore 5 months in arrears.

Is this really who it works?

Share this post


Link to post
Share on other sites
There's a very simple explanation for the jump in monthly arrears.

Many borrowers are on trackers or discounted variable rates linked to the lenders SVR.

Take someone on a IO tracker paying 1% above BoE base. Say his payments were £1000 per month last year when BoE base was 5%. He gets 2 month behind with his repayments so he owes £2000.

This year he's only paying 1.5% and his repayments are down to £200 per month. This has helped him reduce what he owes to £1000.

But, because his repayments are now only £200 per month, he is therefore 5 months in arrears.

nonsense...government schemes to pay the interest would have sorted this guy out.

Share this post


Link to post
Share on other sites
nonsense...government schemes to pay the interest would have sorted this guy out.

So why is there anybody behind with their mortgage?

Your posting style appears to be to deny anything you don't like with unverifyable facts.

Share this post


Link to post
Share on other sites
So why is there anybody behind with their mortgage?

Your posting style appears to be to deny anything you don't like with unverifyable facts.

I don't think you've been around here long enough yet.

Sometimes there is only doublethink.

Share this post


Link to post
Share on other sites
There's a very simple explanation for the jump in monthly arrears.

Many borrowers are on trackers or discounted variable rates linked to the lenders SVR.

Take someone on a IO tracker paying 1% above BoE base. Say his payments were £1000 per month last year when BoE base was 5%. He gets 2 month behind with his repayments so he owes £2000.

This year he's only paying 1.5% and his repayments are down to £200 per month. This has helped him reduce what he owes to £1000.

But, because his repayments are now only £200 per month, he is therefore 5 months in arrears.

That's a plausible explanation.

If they can't keep up payments at these low rates, there's no hope in hell.

Share this post


Link to post
Share on other sites
There's a very simple explanation for the jump in monthly arrears.

Many borrowers are on trackers or discounted variable rates linked to the lenders SVR.

Take someone on a IO tracker paying 1% above BoE base. Say his payments were £1000 per month last year when BoE base was 5%. He gets 2 month behind with his repayments so he owes £2000.

This year he's only paying 1.5% and his repayments are down to £200 per month. This has helped him reduce what he owes to £1000.

But, because his repayments are now only £200 per month, he is therefore 5 months in arrears.

Yes, that makes sense. Depends on how the lenders report the figures, so I don't know if that method does account for the report.

Mortgage interest relief only applies to those on job seekers.

Share this post


Link to post
Share on other sites
So why is there anybody behind with their mortgage?

Your posting style appears to be to deny anything you don't like with unverifyable facts.

im sorry but the rise in prime defaults is not news on this site...its been in the charts for a couple of years. along with Alt-A, IO resets, credit card arrears, government subsidies and the rest of the market perversions.

your post is as much a guess as anything...only a very small number of BoE % mortgages were issued over a very short time...at the peak as lenders became more desparate to create MBS and other derivatives of the same.

defaults are reported as the months payments have not been made, not the amount outstanding AFAIK.

for example, you could pay half your mortgage one month...you would be one month in arrears even if you paid in full for the following months.

im sure Moodys, who are paid to predict, will understand the way the figures are garnered. otherwise they wouldnt issue a warning.

Share this post


Link to post
Share on other sites
im sorry but the rise in prime defaults is not news on this site...its been in the charts for a couple of years. along with Alt-A, IO resets, credit card arrears, government subsidies and the rest of the market perversions.

your post is as much a guess as anything...

No my post is not a guess. Unlike some I do try to ensure my facts are genuine and verifiable.

CML have recently reported a fall in possessions and a levelling off of arrears.

Here's a pertinent point from their report:

The level of arrears of three months or more is somewhat higher. This is partly because earlier sharp falls in interest rates continue to inflate the number of monthly payments that a given monetary amount of arrears represents.

Using your tired and repetitive 'deny everything' strategy I suppose you'll now argue that CML have a VI and their reports are manipulated. ;)

Share this post


Link to post
Share on other sites
No my post is not a guess. Unlike some I do try to ensure my facts are genuine and verifiable.

CML have recently reported a fall in possessions and a levelling off of arrears.

Here's a pertinent point from their report:

Using your tired and repetitive 'deny everything' strategy I suppose you'll now argue that CML have a VI and their reports are manipulated. ;)

CML...thanks for the heads up. (thats the current" mortgages are less than 3 times salary" CML)

course CML also says: There are 270,400 mortgage loans in arrears of three months or more, equivalent to 2.43% of all home loans and up 117,700 on the previous year, according to the Council of Mortgage Lenders.

we only need 5% in arrears to make the banking system unstable.

Edited by Bloo Loo

Share this post


Link to post
Share on other sites

well with rates so low, a doubtful loan of 100% earning 5% goes bad...thats 20 other loans needed just to make the deal break even.

with rates at 3% a bad loan needs even more good ones to keep the deals making money.

The US has a delinquency rate over 6% if my readings are correct.

Share this post


Link to post
Share on other sites
There's a very simple explanation for the jump in monthly arrears.

Many borrowers are on trackers or discounted variable rates linked to the lenders SVR.

Take someone on a IO tracker paying 1% above BoE base. Say his payments were £1000 per month last year when BoE base was 5%. He gets 2 month behind with his repayments so he owes £2000.

This year he's only paying 1.5% and his repayments are down to £200 per month. This has helped him reduce what he owes to £1000.

But, because his repayments are now only £200 per month, he is therefore 5 months in arrears.

Well, assuming that he only went in arrears on the SVR the 2 months before interest rates plummeted, then:

- He's paying the 200 he needs to and none of the arrears (1800) off, or,

- He could pay off the arrears in 3 months, assuming his income isn't interrupted again (800 a month times 2 and a bit months).

So whichever way you cut the stats, if he was in trouble before he should either have paid it off by now, or he's out of income and unable to pay whatever he should be paying.

Share this post


Link to post
Share on other sites
recipe for recoveh

take 10m Prime cut of arrears

mix with 10m puree of credit card arrears

add the 10m of business loan defaults

boil in the reserve pan for 2 months.

stir your politicians, then add in government debt rollovers, stirring with MSM all the time.

Bring back to the boil, now sprinkle in the Corporate rollovers and a sprig of bernankes beard.

serve to public with nice faced ethnic president and watch your stock rise.

:lol::lol::lol:

Very funny, but I don't think that would agree with me. I'll just have the garlic bread thanks.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   296 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.