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Bank Chief Warns Of Wave Of Home Repossessions If Rates Rise

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Bank chief warns of wave of home repossessions if rates rise

http://www.guardian.co.uk/business/2011/jun/27/house-repossessions-wave-interest-rates-rise

I doubt this will surprise too many on this forum:

In a warning that the industry may have been too lenient with some of its customers, he said he believed a policy of "tough love" would be fairer to people facing long-term difficulty in keeping up payments on loans taken out when house prices were at their peak and personal incomes on the rise.

I find this a bit surprising though since BoE have been talking down rate rises and most analysts think it's next year till a rise

His warning came the day after the international bank regulator said the Bank of England, which has kept rates at 0.5% for more than two years, would have to raise rates shortly to curb inflation.

Personally I totally agree with the banker in this article - it's not that I want people to be repossessed, but rather that I don't think the market can recover until it happens.

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Hard luck, I am tired of supporting debtors with the insulting interest I am paid as a saver. If they can`t pay a mortgages at 6% then they should not have taken on the debt. I started off in 1970 at 8.5% and hit 15% at the peak I paid and kept my silence.

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Hard luck, I am tired of supporting debtors with the insulting interest I am paid as a saver. If they can`t pay a mortgages at 6% then they should not have taken on the debt. I started off in 1970 at 8.5% and hit 15% at the peak I paid and kept my silence.

Precisely.

ALL this is the end-result of the Biggest Ever Elephant in the Room:

PREDATORY LIAR LOANS;

....which led to the killer toxic debt that threatens to bring down the whole western economies. :angry:

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Bank Chief Warns Of Wave Of Home Repossessions If Rates Rise

Well ,well, no comment by them in 1990-1992 when a quarter of million home owners found themselves on the street, today the mind boggles when over extended debtors are expected to be bailed and are being bailed out.

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Hard luck, I am tired of supporting debtors with the insulting interest I am paid as a saver. If they can`t pay a mortgages at 6% then they should not have taken on the debt. I started off in 1970 at 8.5% and hit 15% at the peak I paid and kept my silence.

Not quite

You started off with 8.5% and hit a peak of 15% minus TAX RELIEF , which bought the interest rate down by about a third.

I started of at 12% minus TAX RELEIF and hit 15% two and a half years later . However at 15% interest rates the mortgage was still less of my take home pay due to the fairy god mother of wage inflation ( I had 3 decent pay rises in those 2.5 years ) . People forget that paying a mortgage was only hard for a very short time . The young today only want what we had a HOME , you got one , I got one don't begrudge them of one.

By the way interest rates hit 15% twice , the first time 10 years after your start and the second time 20 years , kept your silence , yes not surprised I dought you would have even noticed the rises in payments , there was nothing to say !!

The debtors have been supporting your house rising in value for the last 41 years .

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But in 1990 the rate rises did not take down the banks. The banks are all that matter, the lack of repossessions is just a consequence of saving the banks the un-repossessed are just lucky this time around.

Well then the Banks had not had to deal with the American Lenders who arrived in the mid nineties with loose lending policies and deep pockets and seeing their market share drop dramatically the indigenous Lenders joined the party. Global and European regulations have been a disaster for this country. Fear for your children and grandchildren`s future.

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People having things taken off them that they do not own, never will own, and couldn't afford in the first place.

Pass me a tissue.

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But in 1990 the rate rises did not take down the banks. The banks are all that matter, the lack of repossessions is just a consequence of saving the banks the un-repossessed are just lucky this time around.

Nonsense. I wholeheartedly believe the banks really have the interests of the little people at heart.

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In a warning that the industry may have been too lenient with some of its customers, he said he believed a policy of "tough love" would be fairer to people facing long-term difficulty in keeping up payments on loans taken out when house prices were at their peak and personal incomes on the rise.

"Tough love" for customers but gimme some more taxpayers bailout money.

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The EA Today site offers a regular insight into how much of the MSM spin people have bought into. The prevailing mood over there is that we really are just a short time away from when the banks will start lending at the previous levels again, so property price rises will continue. This is presented as just being around the corner and will make everything fine. Personal and / or mortgage debt is not a problem because it is being inflated away as in the past.

Analysis on this site makes a mockery of both those points of view, but that is what people out there seem to be thinking.

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Bank chief warns of wave of home repossessions if rates rise

http://www.guardian.co.uk/business/2011/jun/27/house-repossessions-wave-interest-rates-rise

(...)

The bank is also trying to tackle customers behind with payments for six months or more and at risk of repossession.

:huh: "Tackle"? How?

6 months behind and only "at risk of" repossession?? :angry:

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The EA Today site offers a regular insight into how much of the MSM spin people have bought into. The prevailing mood over there is that we really are just a short time away from when the banks will start lending at the previous levels again, so property price rises will continue. This is presented as just being around the corner and will make everything fine. Personal and / or mortgage debt is not a problem because it is being inflated away as in the past.

Analysis on this site makes a mockery of both those points of view, but that is what people out there seem to be thinking.

That scenario is possible if it goes all printy-printy, though that would also force up interest rates and bring the whole lot down anyway.

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Hard luck, I am tired of supporting debtors with the insulting interest I am paid as a saver. If they can`t pay a mortgages at 6% then they should not have taken on the debt. I started off in 1970 at 8.5% and hit 15% at the peak I paid and kept my silence.

And over that period where you kept your silence what happened to wages?

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There seems to be a lot of concern at the Bank that the commercial banks are in no better shape now than when they started bailing them out after the financial crisis despite the massive annual subsidy they have received and the huge bonuses that continue to be raped from the taxpayer. The evidence for this comes from a number of different articles of the last week or so.

1. The high levels of forbearance has allowed the banks to avoid provisions and hits to their capital allowing them to carry on paying huge bonuses with no underlying improvement.

2. The large number of loans put onto interest only and the fact that LTV ratios are still very high leaving the banks permanently in a precarious position.

3. Having assumed responsibility from the FSA, the Bank has told the banks they want them to build up their capital and they must pay out less in dividends and bonuses until this is completed.

And banks are clearly not lending and are in a zombie state. The Bank is therefore trying to get the banks to clear up their books before rates rise which would be the equivalent of the tide going out. I think they're giving them plenty of notice much like the removal of SLS. But they should have stopped the bonus/dividend thing straight away and they should force the banks to provide against loans put into forbearance and moved to interest only.

Zombie banks, we are turning Japanese.

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I would like to know how they are going to tackle people like me, and obviously after reading posts on this site all the many others.

1. I never loaded myself up with debt i could never pay back

2. I focused on my business so one day I would be able to afford a home

3. I lived in rented and even in a grotty bedsit so that I could build towards a sustainable repayment mortgage

4. I paid my taxes, never claimed a penny in welfare, and would sooner cut my right knacker off then play the victim and be supported as a healthy person by the state.

5. I have never not paid MY debts

6. Today i am financially in the black

So why can I not buy or be even given the chance to buy property that 100,000's cannot afford to pay for, and probably never could. Five years ago I made the right call and never got taken in by the property propoganda machine that entrapped millions of others, I MADE THE RIGHT CALL.

So how do you tackle people like me, people who work hard and aspire to have their own home, the type os people who years ago made all the right choices and who now have to sit and watch the "i must have it now" reckless borrowers from yesterday be protected, how is that fair?

No you didn't make the right call. I made the same call and it was wrong.

I've got over it. If you can't learn from your mistakes then you are far poorer than just being 100-200k out on the price of a house.

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I would like to know how they are going to tackle people like me, and obviously after reading posts on this site all the many others.

1. I never loaded myself up with debt i could never pay back

2. I focused on my business so one day I would be able to afford a home

3. I lived in rented and even in a grotty bedsit so that I could build towards a sustainable repayment mortgage

4. I paid my taxes, never claimed a penny in welfare, and would sooner cut my right knacker off then play the victim and be supported as a healthy person by the state.

5. I have never not paid MY debts

6. Today i am financially in the black

So why can I not buy or be even given the chance to buy property that 100,000's cannot afford to pay for, and probably never could. Five years ago I made the right call and never got taken in by the property propoganda machine that entrapped millions of others, I MADE THE RIGHT CALL.

So how do you tackle people like me, people who work hard and aspire to have their own home, the type os people who years ago made all the right choices and who now have to sit and watch the "i must have it now" reckless borrowers from yesterday be protected, how is that fair?

Well Said i am in the same situation lots of people i know were taken in by all the bulls££t, this deck of cards is soon going to come tumbling down, this country is broke along with the banks too.

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Hi Thebignothing

Sorry, you are right of course, I did make the wrong call.

If I had my time back I would have loaded up on as much mortgage debt as possible with the attitude that Banks could go whistle if it went wrong.

I was sadly raised in a way that paying back your debts is honourable and the right thing to do, and i really am not being flippant.

No I have learnt from my mistakes alright Thebignothing, I will do what is right for me next time, the degree to which I have turned left wing to right is scary.

Hang on, you did what was right by you.

Loading up on mortgage debt makes no difference - it's still secured and the repayments will go on and on and on. No real benefit there.

The cynical play was to load up on credit card debt - £200k not unusual - take it as cash and buy something beyond the knowledge of of creditors. Then go bankrupt and quit the country.

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The EA Today site offers a regular insight into how much of the MSM spin people have bought into. The prevailing mood over there is that we really are just a short time away from when the banks will start lending at the previous levels again, so property price rises will continue. This is presented as just being around the corner and will make everything fine. Personal and / or mortgage debt is not a problem because it is being inflated away as in the past.

Analysis on this site makes a mockery of both those points of view, but that is what people out there seem to be thinking.

the political cost to the govt will be too high for them to allow the market to fall precipitously, they will soften it very considerably

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Hi Thebignothing

Sorry, you are right of course, I did make the wrong call.

If I had my time back I would have loaded up on as much mortgage debt as possible with the attitude that Banks could go whistle if it went wrong.

I was sadly raised in a way that paying back your debts is honourable and the right thing to do, and i really am not being flippant.

No I have learnt from my mistakes alright Thebignothing, I will do what is right for me next time, the degree to which I have turned left wing to right is scary.

there's a term in investing parlance, from conservative value inmvestors, considered to be one of the worst investing errors - "being right for the wrong reason"

this is what people who loaded up with stoopid mortgage debt and got away with it are, therew is a high chance they get cocky as a result and then go and place a bigger bet down the line and lose it all, even now

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Hang on, you did what was right by you.

Loading up on mortgage debt makes no difference - it's still secured and the repayments will go on and on and on. No real benefit there.

The cynical play was to load up on credit card debt - £200k not unusual - take it as cash and buy something beyond the knowledge of of creditors. Then go bankrupt and quit the country.

What, for £200K?

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Sorry, you are right of course, I did make the wrong call.

If I had my time back I would have loaded up on as much mortgage debt as possible with the attitude that Banks could go whistle if it went wrong.

I was sadly raised in a way that paying back your debts is honourable and the right thing to do, and i really am not being flippant.

No I have learnt from my mistakes alright Thebignothing, I will do what is right for me next time, the degree to which I have turned left wing to right is scary.

Paying back debts is what should be done. What was wrong (and still is) is that lenders are lending with the expectation that a significant number of debts will not be paid.

Northern Rock built a business on this. They probably expected that 10% of the loans would go rotten, but then they'd get the property, so only a small overall loss.

They lent big so their turnover was increased. On the other hand, traditional building societies, made conservative loans meaning less turnover.

You should always do what is right for you, and who knows you may have. 18 months down the line when the repossessions take hold, your opinion may change.

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The EA Today site offers a regular insight into how much of the MSM spin people have bought into. The prevailing mood over there is that we really are just a short time away from when the banks will start lending at the previous levels again, so property price rises will continue. This is presented as just being around the corner and will make everything fine. Personal and / or mortgage debt is not a problem because it is being inflated away as in the past.

Analysis on this site makes a mockery of both those points of view, but that is what people out there seem to be thinking.

The problem is that they take signal from a small number of lenders and extrapolate to the whole mortgage market

Some banks will be lending more like they say others (most) not. They seem to think it is predicated on SLS and CGS being paid off, they they mostly have been, but they now have the assets used as coming back on balance sheet and need to sort out what they have swept under the carpet (lots of press coverage yesterday).

1. The specialist lenders in the market disappeared in 2007-8 therefore no more lending from them.

2. Lloyds and RBS won't be increasing lending again for another few years. (Lloyds coverage yesterday)

3. Nationwide as a BS will struggle to find the funding to significantly increase lending

4. Santander, not sure if they have purged themselves of the A+L issue rather than just plastered over them.

5. That leaves Barclays and HSBC left to increase the lending and HSBC has pretty conservative lend criteria and is the smallest mortgage lender of the big 6, but growing.

Edited by koala_bear

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We really are in this together, we cant afford housing to fall becuase it will blow up the UK banking sector and quite possibly the financial system as it couldnt handle the UK going the way of Greece.

I think there are people with everything to lose, whereas there are many who would see a fall in value of pensions/property/savings, but end up in a better position. I think we can afford housing to fail. What we cannot afford is mass unemployment. A round of repossessions would be good to bring the property values down. People won't sell because they have negative equity, but will still work to keep a roof over their head. The main losers will be the BTL leeches and I have no sympathy for them.

Edited by arrgee1991

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(...)

So why can I not buy or be even given the chance to buy property that 100,000's cannot afford to pay for, and probably never could. Five years ago I made the right call and never got taken in by the property propoganda machine that entrapped millions of others, I MADE THE RIGHT CALL.

So how do you tackle people like me, people who work hard and aspire to have their own home, the type os people who years ago made all the right choices and who now have to sit and watch the "i must have it now" reckless borrowers from yesterday be protected, how is that fair?

Yep. Welcome to the Forum killkon. You have found the right "support group" for your condition. :P

Many here feel the same. Me included. I've known it was a bubble since (IIRC) back in 2003 or 04, and I've been expecting a correction since then. By 2006-08 I was already growing fecking "Tired of Waiting" for it! Imagine how I (and many here) feel now!!! We are in the middle of 2011!!! It is just unfeckingbelievable!!!

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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% +
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      • Even
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      • up 5%



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