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Giving Troubled Mortgage Borrowers A Second Chance Is Storing Up Trouble For The Banks

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http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8412206/Giving-troubled-mortgage-borrowers-a-second-chance-is-storing-up-trouble-for-the-banks.html

Increased "lender forebearance" in the wake of the financial crisis whereby banks allow borrowers to extend the repayment period for their debt, switch a repayment mortgage to an interest-only product, or even allow them a holiday on interest payments, pose a risk to British banks.

In a report on the flexibility of UK banks to troubled mortgage borrowers, the ratings agency's analysts said the practice was a "credit negative" for the country's banking system.

"There is still high indebtedness on mortgages and there is potential for more borrowers to get into difficulty. As the forebearance numbers are aggregated it is hard to know the scale of the issue for any individual bank, but it is a concern," said Elisabeth Rudman, a senior credit officer at Moody's.

Moody's concerns follow the publication last week by the Financial Services Authority of its risk outlook report for the financial system, which drew attention to the issue.

FSA figures show that for every UK mortgage borrower in arrears, two are subject to some kind forebearance process to help them avoid defaulting on their debt.

Don't worry I'm sure austerity will help out all of these borrowers.

Another taxpayer rescues seems inevitable as the politicians will try and save the Titanic again.

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0.5% base rate is already subsidising the indebted, the BTLers, the Mewers and other forms of financial illiterates.

One hike and down it all comes. Merv is right not to hike as to do so will bring down the economy.

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0.5% base rate is already subsidising the indebted, the BTLers, the Mewers and other forms of financial illiterates.

One hike and down it all comes. Merv is right not to hike as to do so will bring down the economy.

Of course, imported inflation would do the same job.

so what does he decide?...well, he sticks to his job...protect bankers.

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  • 309 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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