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Lenders Get Tough Again On Mortgage Defaulters

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Lenders get tough again on mortgage defaulters

By RICHARD DYSON

Last updated at 9:32 PM on 9th April 2011

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Lenders are stepping up their efforts to pursue borrowers in arrears, according to courtroom statistics and anecdotal reports from lawyers. Some lawyers even claim they are seeing a return to the harsher debt- collection practices used before the credit crunch.

From early 2009, the Government leant heavily on lenders to hold back from repossessing homes or taking draconian action.

Repossessions in 2009 and 2010 were lower than predicted and lenders allowed arrears to build. In early 2007, for instance, 127,000 mortgages were more than three months behind on payments, compared with today’s figure of 239,000.

Mortgages that were more than 12 months in arrears grew more dramatically from 15,300 in 2007 to 62,300 today.

But now, says consumer credit lawyer Daniella Lipszyc of Ultimate Law in Warrington, Cheshire, banks are biting back. She says her caseload – typically representing distressed borrowers against lenders – has doubled in 12 months.

‘Lenders appear to be operating on the basis that the recession is over and it’s business as usual,’ she says. ‘This is clearlynot the case. Households are in as bad a financial position now as a year ago, if not worse.’ 

Lipszyc believes that banks are increasingly confident of courts granting possession orders or other rulings in their favour.

This trend, if it is one, has yet to trickle through to repossession figures. Ministry of Justice data shows possession actions issued in English and Welsh courts fell slightly from 18,800 in the first quarter of 2010 to 17,800 in the last. It is expected that data for this quarter will show a rise.

Other evidence points to a hardening of lenders’ attitudes. Sweet & Maxwell, a legal data provider, says that between the first and third quarters of last year the number of ‘attachment of earnings orders’ rose 30 per cent.

These require borrowers’ employers to deduct money from thei r wages. The money is paid to the court.

 

could lenders be getting fearful? Hopefully this is a trend and not just the Mail picking up on something that isn't there. But if true then it's a self propelling downward spiral. The banks who hold back lose. Those who repossess and liquidate assets quick minimalise losses.

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could lenders be getting fearful? Hopefully this is a trend and not just the Mail picking up on something that isn't there. But if true then it's a self propelling downward spiral. The banks who hold back lose. Those who repossess and liquidate assets quick minimalise losses.

That's a fascinating line of thought... and I like it!

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Sounds like they want to panic first to try and reduce losses, which will probably trigger a bigger panic and even bigger losses. No matter the taxpayer gets to foot the bill. So the taxpayers will get evicted and then get to take part in the bankers compensation for the losses incurred in foreclosing.

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There's that word again

the Government leant heavily on lenders to hold back from repossessing homes or taking draconian action

On Question TIme last week Jeremy Hunt said the Irish were taking draconian measures like 15% Public Sector pay cuts.

I've checked the dictionary and it doesn't say ONLY measures taken relating to excessive debt or cutting excessive pay are "draconian"

So can someone tell me why "draconian" doesn't apply to a -5% real interest rate with RPI 5.5% and Base Rate 0.5%?

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Sounds like they want to panic first to try and reduce losses, which will probably trigger a bigger panic and even bigger losses. No matter the taxpayer gets to foot the bill. So the taxpayers will get evicted and then get to take part in the bankers compensation for the losses incurred in foreclosing.

And paying the bankers' bonuses while they sort that out.

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Injin be along soon to tell us the debt doesnt exist?

Now you've said that, he'll be along to tell you it DOES exist. Just because YOU believe something doesn't mean that Injin can't be contrarian, there is no money, god, system, gold, food, banks, world, solar system, galaxy, galaxy cluster, galaxy super cluster, universe, multi-verse, "this is what the government would like you to believe" :)

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Now you've said that, he'll be along to tell you it DOES exist. Just because YOU believe something doesn't mean that Injin can't be contrarian, there is no money, god, system, gold, food, banks, world, solar system, galaxy, galaxy cluster, galaxy super cluster, universe, multi-verse, "this is what the government would like you to believe" :)

Injin doesn't exist, he's a piece of software designed by Fubra, to pad out topics of conversation on HPC. Known internally as the "Injin Algorithm" tongue.gif

Edited by Sir John Steed

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Good. Repossess them, get them back on the market and let people who can meet the repayments buy them at fair market value - you know, all those people who decided that housing was just too expensive and prudently decided to rent instead while saving for a deposit. Let's get this effing housing market moving again!! It's time for people to sh!t or get off the pot.

I used to have sympathy but fk it: this is taking far too long. It's a dog eat dog world and their housing needs do not take priority over my own. If you're STILL in arrears 3 years after the Gordon Brown trillion pound giveaway, SMI and 25 months of 0.5% interest rates then you're always going to be I'm afraid and probably shouldn't have even bought in the first place.

It's time to accept the inevitable graciously and move over. Harsh, I know, but true.

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Good. Repossess them, get them back on the market and let people who can meet the repayments buy them at fair market value - you know, all those people who decided that housing was just too expensive and prudently decided to rent instead while saving for a deposit. Let's get this effing housing market moving again!! It's time for people to sh!t or get off the pot.

I used to have sympathy but fk it: this is taking far too long. It's a dog eat dog world and their housing needs do not take priority over my own. If you're STILL in arrears 3 years after the Gordon Brown trillion pound giveaway, SMI and 25 months of 0.5% interest rates then you're always going to be I'm afraid and probably shouldn't have even bought in the first place.

It's time to accept the inevitable graciously and move over. Harsh, I know, but true.

+ lots

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Good. Repossess them, get them back on the market and let people who can meet the repayments buy them at fair market value - you know, all those people who decided that housing was just too expensive and prudently decided to rent instead while saving for a deposit. Let's get this effing housing market moving again!! It's time for people to sh!t or get off the pot.

I used to have sympathy but fk it: this is taking far too long. It's a dog eat dog world and their housing needs do not take priority over my own. If you're STILL in arrears 3 years after the Gordon Brown trillion pound giveaway, SMI and 25 months of 0.5% interest rates then you're always going to be I'm afraid and probably shouldn't have even bought in the first place.

It's time to accept the inevitable graciously and move over. Harsh, I know, but true.

Amen.

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Good. Repossess them, get them back on the market and let people who can meet the repayments buy them at fair market value - you know, all those people who decided that housing was just too expensive and prudently decided to rent instead while saving for a deposit. Let's get this effing housing market moving again!! It's time for people to sh!t or get off the pot.

I used to have sympathy but fk it: this is taking far too long. It's a dog eat dog world and their housing needs do not take priority over my own. If you're STILL in arrears 3 years after the Gordon Brown trillion pound giveaway, SMI and 25 months of 0.5% interest rates then you're always going to be I'm afraid and probably shouldn't have even bought in the first place.

It's time to accept the inevitable graciously and move over. Harsh, I know, but true.

There were some high end properties in the back of the sunday times house bit going for a firesale. One was £2million down from £3.25mill.

Still looked like the kind of places you could get in Florida for $100k and actually get good weather.

Also, though i only usually search for detached homes, did some searches for semis the other day to see if any had good size plots, and saw lots of repos. Detached holding up better i guess?

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There's that word again

On Question TIme last week Jeremy Hunt said the Irish were taking draconian measures like 15% Public Sector pay cuts.

I've checked the dictionary and it doesn't say ONLY measures taken relating to excessive debt or cutting excessive pay are "draconian"

So can someone tell me why "draconian" doesn't apply to a -5% real interest rate with RPI 5.5% and Base Rate 0.5%?

Well I reckon it's best described as a 'massive boon'. But then I'm up to my nuts in gold, as you well know.

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Good. Repossess them, get them back on the market and let people who can meet the repayments buy them at fair market value - you know, all those people who decided that housing was just too expensive and prudently decided to rent instead while saving for a deposit. Let's get this effing housing market moving again!! It's time for people to sh!t or get off the pot.

I used to have sympathy but fk it: this is taking far too long. It's a dog eat dog world and their housing needs do not take priority over my own. If you're STILL in arrears 3 years after the Gordon Brown trillion pound giveaway, SMI and 25 months of 0.5% interest rates then you're always going to be I'm afraid and probably shouldn't have even bought in the first place.

It's time to accept the inevitable graciously and move over. Harsh, I know, but true.

Agreed. F4ck 'em!!!

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+ lots and lots.

Except, I never had any sympathy to begin with.

Not sure I totally agree. I know a lot of peers who bought in at close to peak prices afraid that if they didn't buy then they never would be able to.

People should not have to make the greatest purchase of their life from a point of fear.

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Not sure I totally agree. I know a lot of peers who bought in at close to peak prices afraid that if they didn't buy then they never would be able to.

People should not have to make the greatest purchase of their life from a point of fear.

why do people by Ipad 2?

is it fear of being left out?

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Not sure I totally agree. I know a lot of peers who bought in at close to peak prices afraid that if they didn't buy then they never would be able to.

People should not have to make the greatest purchase of their life from a point of fear.

No, you got that wrong. People should not be allowed to make the greatest purchase of their life because of fear, ie stop giving stupid people too much credit. The fear / desire was always there, just not the credit.

Cash, the right wing Gestapo.

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Not sure I totally agree. I know a lot of peers who bought in at close to peak prices afraid that if they didn't buy then they never would be able to.

People should not have to make the greatest purchase of their life from a point of fear.

Likewise. Now selling on the other hand, well that's a different matter... and there's plenty of that about at the moment. :D

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Not sure I totally agree. I know a lot of peers who bought in at close to peak prices afraid that if they didn't buy then they never would be able to.

People should not have to make the greatest purchase of their life from a point of fear.

Ok, many bought at peak. In doing so most will have taken on a 25 year commitment to repay a sum of money to live in their house.

Guess what? Nothings changed. They are still encumbered exactly the same mortgage obligations they had 3-4 years ago, but those on trackers have had the added bonus of low interest rates which allowed them to pay off their debt quicker if desired.

Its a sad fact that society needs fall guys like your friends who bought at peak. It needs them to tell people to beware of taking on too much debt, to beware of herd mentality buying behaviour. We need to see peopel lose out tolearn from their mistakes.

But in truth, when they bought they took on a commitment to repay a sum of money. They happily entered that commitment. they havent lost out. Theyve got exactly what they signed up for - Diddums if HPI riches has eluded them!

Edited by Caveat Mortgagor

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  • 315 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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