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The Masked Tulip

They Still Think Hps Have A Long Way To Drop In The Us

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How have The States had a house price crash but we havent when interest rates are similar and both have big problems with unemployment wages and debt?

Is it the differences in foreclosure policy?

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How have The States had a house price crash but we havent when interest rates are similar and both have big problems with unemployment wages and debt?

Is it the differences in foreclosure policy?

We have, it is just that it has not been as severe as in the US. You are right to point to the foreclosure policy. Thanks to the 'dust bowl' of the 1930's, US law states that the most that a bank (or creditor) can expect on foreclosure is what the property sold for. Any outstanding is a loss. Given that, you'd have thought that US lenders would have been somewhat more diligent...

Crash suggests something sudden and fast. Not really a good word for a drop in house prices. I've been on this site since 2005 and some even longer and I am still waiting for prices to return to something approaching sensible...

Edited by FTBagain

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My GF's brother in law and sister are selling their house in San Diego under a short sale deal. the balance on their mortgage is $350k. they have had an offer of $200k which the lender will allow them to sell for and they will not be persued for the $150k difference. It wrecks your credit rating but they are moving over to the UK so doesn't matter so much anyway.

No such schemes over here that i can think of - we just keep people in their over-priced homes using public money, prolonging the problem to the detriment of the whole economy.

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How have The States had a house price crash but we havent when interest rates are similar and both have big problems with unemployment wages and debt?

Is it the differences in foreclosure policy?

We are an island with limited supply of stock the bulls would tell you. I think the difference is that here it's a political issue, whereas both parties in the States seem equally happy for people to lose the property they are renting a mortgage on.

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How have The States had a house price crash but we havent when interest rates are similar and both have big problems with unemployment wages and debt?

Is it the differences in foreclosure policy?

During the boom the US was building houses at a far greater rate than we were in the UK. There is now a massive oversupply of new buildings over there. Also US mortgage rates are usually fixed for the duration of the loan, so many people were stuck with 5,6,7% rates after the crash wheras in the UK most mortgages are variable and people here have seen their rates fall to 2 or 3%.

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Houses will drop until they fall just below the point at which they are hiostorically affordable. 2.5 to 3 times average income. We have a lonnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnng way to go ourselves.

The US are just a few years ahead of the curve we will soon be joining. I agree with Broon for once, there is a lot more trouble headed down the pike yet.

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The key difference is that US homes mortgages are tied to long term (10yr) interest rates, which don't change as much. UK mortgages are tied to short term 2/3 year rates, so we have been able to stave off a bigger fall with ZIRP. Of course this will act as a drag on the UK economy when rates rise.

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During the boom the US was building houses at a far greater rate than we were in the UK. There is now a massive oversupply of new buildings over there. Also US mortgage rates are usually fixed for the duration of the loan, so many people were stuck with 5,6,7% rates after the crash wheras in the UK most mortgages are variable and people here have seen their rates fall to 2 or 3%.

Also, property taxes are extremely high in many States, and many households have simply been unable to cope

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We have, it is just that it has not been as severe as in the US. You are right to point to the foreclosure policy. Thanks to the 'dust bowl' of the 1930's, US law states that the most that a bank (or creditor) can expect on foreclosure is what the property sold for. Any outstanding is a loss. Given that, you'd have thought that US lenders would have been somewhat more diligent...

Crash suggests something sudden and fast. Not really a good word for a drop in house prices. I've been on this site since 2005 and some even longer and I am still waiting for prices to return to something approaching sensible...

The ability to walk away from the loan and property (jingle mail) depends on the particular state.

In non-recourse states, the lender has no recourse to the borrower over and above the amount of the security - i.e. cannot pursue the lender for the shortfall in the case of a negative equity sale. Examples of non-recourse States are: Alaska, Arizona, California, Connecticut, Florida, Idaho, Minnesota, North Carolina, North Dakota, Texas, Utah, Washington. Even in these States, any second mortgage can pursue the owner.

Elsewhere, the lenders can pursue the borrowers for the full balance. Examples include Maryland, Virginia, Illinois.

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  • 312 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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