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Repossessions Figures For The First Quarter Cml

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There was little change in the level of mortgage payment difficulties in the first quarter of 2011, according to new data released today by the Council of Mortgage Lenders.

Out of the 11.3 million outstanding first-charge mortgages in the UK at the end of March 2011, a total of 9,100 properties were taken into possession in the first quarter of 2011 (0.08% of all loans). This was 15% up from the 7,900 in the fourth quarter of 2010 (the fourth quarter of the year typically sees a lower number), but 10% lower than the same period a year ago, and equal to the average quarterly number of repossessions throughout 2010.

The total number of mortgages in arrears also continued to fall, and numbers fell in all but the deepest arrears band. At the end of March, the number of mortgages with arrears equivalent to 2.5% or more of the outstanding balance showed an improvement to 166,900 (1.47% of all loans), just under 2% down from 170,000 (1.5% of all loans) at the end of December 2010, and an 11% improvement on the 187,300 (1.65% of loans) a year earlier. On this measure, the first quarter saw the lowest share of mortgages in arrears since the third quarter of 2008.

The only arrears band where a worsening was experienced was where arrears exceeded 10% of the mortgage balance. This band increased slightly in number, from 27,400 at the end of 2010 to 27,700, although the proportion of all loans was unchanged at 0.24%.

The CML's current forecasts of 40,000 repossessions and 180,000 arrears cases of 2.5% or more at end-year already anticipate short-term pressure on household finances as a result of an expected squeeze on incomes. Overall, the prospect of low interest rates for a protracted period should limit the adverse impact on keeping up mortgage payments, despite the increased tax and inflation burden on households. However, the increased regulatory emphasis on prudential issues, including the FSA's concerns that "excessive" forbearance may be storing up future problems, needs to be balanced against the objective of minimising repossessions for both social and market related reasons.

CML director general Michael Coogan commented:

"In essence, good arrears management practice is a balance between giving households every chance to rehabilitate and get back on track, and limiting the damage in the minority of cases where this is not going to be achievable.

"Looking ahead, the financial position of many households is likely to be stretched for some while, and some will inevitably find themselves in difficulty. Lenders have a range of options to nurse borrowers through temporary problems, but will clearly need to be mindful of the regulator's concern that too much forbearance may be as bad as too little.

"Any household facing temporary difficulty can be reassured that there are many checks and balances in place to ensure that they are treated fairly, receive good advice, and have every chance to stay in their home where this will be sustainable for them in the long term. If in doubt, take advice from Shelter, Citizens Advice, or National Debtline - and do talk to your lender as they will want to help you."

Edited by exiges

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BBC Link

Home repossessions rise 15%, CML says

Empty houses Low mortgage rates have saved some people from losing their homes

A total of 9,100 homes were repossessed in the UK in the first three months of 2011, up 15% on the previous quarter, lenders say.

The figure was 10% lower than the same period the previous year and in line with the quarterly average of 2010, the Council of Mortgage Lenders (CML) said.

However, the number of householders getting behind on mortgage payments has fallen slightly since December.

The CML warned that households would be financially stretched for some time.

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the FSA's concerns that "excessive" forbearance may be storing up future problems, needs to be balanced against the objective of minimising repossessions for both social and market related reasons.

Mmmmmmmmm.

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My link

A total of 9,100 homes were repossessed in the UK in the first three months of 2011, up 15% on the previous quarter, lenders say.

.......

The group has predicted that a total of 40,000 people will lose their homes this year, up from 36,300 in 2010.

Missing payments

Repossessions were at a relatively low level at the end of 2010, but the latest quarterly figures show the first three-month on three-month rise since the third quarter of 2009.

But while more homes were repossessed, arrears levels fell during the same period.

At the end of March, the number of mortgages with arrears equivalent to 2.5% or more of the outstanding balance stood at 166,900, which was 1.47% of all loans.

This was less than the 170,000, or 1.5%, of loans in arrears at the end of December 2010, and 11% lower than the 187,300 home loans in arrears, 1.65% of loans, a year earlier.

Some of the maths here is questionable. They state that the number of mortgages in arrears has dropped by 3,100 quarter on quarter(from 170k to 166.9k), but surely those 9,100 repos came from within those 170,000 in arrears. So despite ending 9,100 mortgages by repossession, the number in significant arrears only dropped by 3,100. ie 6,000 more mortgageholders fell into significant arrears over the three months between Dec 2010 and March 2011.

Edited by cheeznbreed

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it might be stating the obvious but I've always thought this was the key stat for a proper HPC.

The CML used to publish the repo stats going back past the last crash. The peak was around 75,000 per year in the early 90s, however there was a number of years in a row where the annual number was 50k - 60k+ so the total over these few years was well over 150k. I once compared the % of total mortgages back then to the 75k number and applied it to the current level of loans, an equivalent peak today would be over 100k repos per year. (the CML has since only made these numbers available to memebers, but they could probably be found with a bit of digging).

Repos this time for whatever reason (low IRs, reluctance of banks to issue repo, etc...) are no where near these numbers, so until they increase a lot I doubt we'll see major drops in prices needed for a HPC like the one in the 90s.

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Here's the official line from Shappsy.

http://www.communities.gov.uk/news/newsroom/1901803

Housing Minister Grant Shapps has today called on struggling homeowners not to bury their heads in the sand but to seek early help if they are at risk of repossession.

He urged anyone who thinks they may be at risk of losing their home to take action immediately, saying that there is help available, and that repossession should only ever be the very last resort.

I still think they will do everything in their power to prevent a surge in repos and any kind of crash in the market.

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We must consider, the state owns a major proportion of UK mortgages. Think of the HBOS/LLOYS/RBS/NRK monopoly. They'll all be running on the same policies roughly. Apart from low interest rates, this is a major factor compared to the 1990s.

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Here's the official line from Shappsy.

http://www.communiti...ewsroom/1901803

I still think they will do everything in their power to prevent a surge in repos and any kind of crash in the market.

I kinda agree whith them - most mortgages owner occupiers simply got caught up in the whirlwind, and prices can correct in less transient ways; I have little sympathy for the following tho: BTLrs (business risk, even if you're a nice guy - tough); MEWers; owner occupiers who

lavishly overpaid, not because they had to, but to speculate.

Edited by Si1

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Repossessions went up 15% in the first quarter of this year.

Compared with the final quarter of last year, when 7,900 properties were possessed, 9,100 properties were possessed in the first three months of 2011.

However, the figure was 10% lower than the same period a year ago, and equal to the average quarterly number of repossessions throughout 2010.

The total number of mortgages in arrears also fell – but only very slightly. At the end of March, the number of mortgages with arrears equivalent to 2.5% or more of the outstanding balance showed an improvement to 166,900 (1.47% of all loans), compared with 170,000 (1.5% of all loans) at the end of December 2010.

The Council of Mortgage Lenders is currently forecasting 40,000 repossessions and 180,000 arrears cases of 2.5% or more by the end of this year.

However, the CML has acknowledged concerns expressed this week by the Financial Services Authority which says that lenders are hiding the true figures by their “excessive” forbearance of borrowers in arrears.

CML director general Michael Coogan admitted: “Too much forbearance may be as bad as too little.”

This week, the FSA accused lenders of hiding the true state of their mortgage books by using techniques such as extending the term of the mortgage, transferring it to interest-only, or ‘flexing’ the terms of the deal.

The FSA said that lenders were particularly likely to use excessive forebearance “in an environment of falling or stagnating housing collateral prices”.

A further warning also came from Michael Ossei, personal finance expert at uSwitch.com, who said: “This drop in arrears is not likely to last much longer as we are facing a perfect storm.”

He said that when stagnant salaries and rising costs, including energy, hit home, many households would be in “dire straits”.

http://www.introducertoday.co.uk/News/Story/?title=Repos%20up%2015%25%20%E2%80%93%20but%20is%20forbearance%20hiding%20the%20real%20picture%3F&storyid=4265&type=news_features

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the reality is that it's currently in the banks interests to repo as little as possible.fire sales will serve to dampen prices and further impact their balance sheets will cause more repoing/fireselling and on and on....problem is that one day,one of them will blink first,realsie that if they get out ahaead of the otehrs they might do better and then all hell could break loose.

there must be no end of people breaching their margin call clauses in the T+C's ref LTV that could instantly be used to foreclose.

so this means it is actualy worse than what is being said in the MSM

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so this means it is actualy worse than what is being said in the MSM

Probably much worse. Add in SMI, where the taxpayer pays for your home, and I dont really know how anyone manages to get repossessed. Anyone with a family who gets repossessed must clearly have issues other than financial ones.

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http://www.stop-repossessions.co.uk/news/2011/May/repossessions-are-increasing-again.html

Repossessions Are Increasing Again
Fri, 13 May 2011
There were 75,000 repossessions in 1991 during the last major UK recession compared to 36,000 repossessions in 2010 and 40,000 forecast for 2011.
The Council of Mortgage Lenders yesterday showed that 9,100 homes were repossessed in the first three months of the year.
That was 15% more than in the final quarter of 2010 and the first increase since the third quarter of 2009. However, it was still down 10% than the same period last year.
There have not been as many repossessed homes in the last few years as mortgage lenders have opted to help borrowers through their problems as opposed to repossessing their homes.
The slight increase in terms of repossessions for 2011 is due to the squeeze on household incomes due to increases in taxes, cost of living and slow wage growth. An increase in interest rates would worsen matters.

All the indicators appear to be in alignment. The HPC is gathering momentum.

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