NEO72 Posted July 16, 2011 Share Posted July 16, 2011 Just seen this in today's Independent, notable mainly for the following statistic: Meanwhile, analysis of Financial Services Authority figures suggests that 760,000 mortgages are subject to some form of forbearance by lenders (forbearance is when a lender agrees not to foreclose on a mortgage even though a borrower has failed to make repayments). It means the number of homeowners in financial distress – either in arrears, going through repossession or in forbearance – now stands at 1.2 million, or more than one in 10 of the current total of outstanding mortgages. So 1 in 10 - ahem - "homeowners" with mortgages are basically still in their home entirely due to the 'generosity' of lenders. How many more cracks can appear in the dam before the masses realise its about to burst?? Link Quote Link to comment Share on other sites More sharing options...
leicestersq Posted July 16, 2011 Share Posted July 16, 2011 Just seen this in today's Independent, notable mainly for the following statistic: So 1 in 10 - ahem - "homeowners" with mortgages are basically still in their home entirely due to the 'generosity' of lenders. How many more cracks can appear in the dam before the masses realise its about to burst?? Link The housing problem will remain, but those with the housing problem could change. If markets are allowed to act, those unable to repay will lose their homes, and those with the better finances will get them. If government tries to intervene, that may not happen, but as a result we will see either state default, or hyper inflation. Quote Link to comment Share on other sites More sharing options...
okaycuckoo Posted July 16, 2011 Share Posted July 16, 2011 (edited) I reckon the figure for distressed mortgages is quite a bit higher. I wonder do they include mortgages that have been converted to IO or had arrears capitalised? Edited July 16, 2011 by okaycuckoo Quote Link to comment Share on other sites More sharing options...
OnlyMe Posted July 16, 2011 Share Posted July 16, 2011 Number of financially distressed renters is even higher. This market is not one looking for a pin, it is waiting to see which hedgehog rolls up. Quote Link to comment Share on other sites More sharing options...
erranta Posted July 16, 2011 Share Posted July 16, 2011 Just seen this in today's Independent, notable mainly for the following statistic: So 1 in 10 - ahem - "homeowners" with mortgages are basically still in their home entirely due to the 'generosity' of lenders. How many more cracks can appear in the dam before the masses realise its about to burst?? Link The big question is Is this all going on in other countries of Europe/World or are the Masonic-Occult elites (whilst they plunge us into increasing debt) deliberately targetting the UK population of "Profanes"? Quote Link to comment Share on other sites More sharing options...
MrFlibble Posted July 16, 2011 Share Posted July 16, 2011 Shame, when are they being shown the door (of their own house) so someone who isn't so feckless can have a go? The UK housing market desperately needs some real price discovery... Quote Link to comment Share on other sites More sharing options...
wonderpup Posted July 16, 2011 Share Posted July 16, 2011 The UK housing market desperately needs some real price discovery... Vast sums of money are being spent to prevent this discovery from taking place- it's exactly this possibility that keeps the central bankers awake at night- housing is the centre that cannot hold. Quote Link to comment Share on other sites More sharing options...
Self Employed Youth Posted July 16, 2011 Share Posted July 16, 2011 I reckon the figure for distressed mortgages is quite a bit higher. I wonder do they include mortgages that have been converted to IO or had arrears capitalised? It would be interesting to find out how many IO mortgages there are. Quote Link to comment Share on other sites More sharing options...
Fishfinger Posted July 17, 2011 Share Posted July 17, 2011 Just seen this in today's Independent, notable mainly for the following statistic: So 1 in 10 - ahem - "homeowners" with mortgages are basically still in their home entirely due to the 'generosity' of lenders. How many more cracks can appear in the dam before the masses realise its about to burst?? Link Now there's statistic for us oldies... Quote Link to comment Share on other sites More sharing options...
Timak Posted July 17, 2011 Share Posted July 17, 2011 I was doing some reports for a Housing department of a local authority a few weeks back. They have to do the assesment of how many people are in trouble with their mortgages and the reasons why. The main reason by far (in the relatively affluent part of the country I was working in) was fall in income for self-employed worker. The main lender was....drumroll please....Northern Rock. And the average amount of shortfall on payments was £6k. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted July 17, 2011 Share Posted July 17, 2011 I was doing some reports for a Housing department of a local authority a few weeks back. They have to do the assesment of how many people are in trouble with their mortgages and the reasons why. The main reason by far (in the relatively affluent part of the country I was working in) was fall in income for self-employed worker. The main lender was....drumroll please....Northern Rock. And the average amount of shortfall on payments was £6k. as a renter, 6K behind means an eviction. Quote Link to comment Share on other sites More sharing options...
tastingstars Posted July 17, 2011 Share Posted July 17, 2011 Just seen this in today's Independent, notable mainly for the following statistic: So 1 in 10 - ahem - "homeowners" with mortgages are basically still in their home entirely due to the 'generosity' of lenders. How many more cracks can appear in the dam before the masses realise its about to burst?? Link As an anecdotal aside, our kids attend our local primary which is good enough to attract the usual hordes of bubble-fuelled property developers, financial advisers, marketing consultants and homoeopaths now able to buy locally. The school has a fund for people who can't afford the cost of trips and although the catchment extends across into one of our hometown's most deprived areas, it's never been used that much and has always remained in the black. Suddenly the subsidised tickets for every single trip are being used up, presumably by the mass of parents who still drive their kids to school in new cars but are in secret financial distress. There's a particular street of period cottages near the school and my other half was unimpressed when I suggested that financial distress would hit them all and it would lead to an outbreak of partner-swapping and broken marriages Quote Link to comment Share on other sites More sharing options...
Timak Posted July 17, 2011 Share Posted July 17, 2011 as a renter, 6K behind means an eviction. As a mortgage holder it means your LA using taxpayers money to see if you are eligible for more taxpayers money to pay your mortgage for a while, Quote Link to comment Share on other sites More sharing options...
pl1 Posted July 17, 2011 Share Posted July 17, 2011 (edited) Just seen this in today's Independent, notable mainly for the following statistic: So 1 in 10 - ahem - "homeowners" with mortgages are basically still in their home entirely due to the 'generosity' of lenders savers. How many more cracks can appear in the dam before the masses realise its about to burst?? Link Time to let market mechanisms work. What's fair about the prudent bailing them out? I wonder how many MEW'd in the good times? Maybe this could be an additional criterion about who receives help. Edited July 17, 2011 by pl1 Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted July 17, 2011 Share Posted July 17, 2011 http://www.ccrmagazi...Itemid=99999999 "However, the position can be ameliorated as lenders work with borrowers and come up with innovative schemes to allow them to remain in their homes in the short term or even long term." what is innovative about money lending?? Lying seems to be the answer...Lying about the value of the pledged asset, lying about the amount of government support the lender is receiving, lying about the arrears of the borrower. LIAR LOANS go way way further than the signature on the Income statement. Quote Link to comment Share on other sites More sharing options...
R K Posted July 17, 2011 Share Posted July 17, 2011 The housing problem will remain, but those with the housing problem could change. If markets are allowed to act, those unable to repay will lose their homes, and those with the better finances will get them. If government tries to intervene, that may not happen, but as a result we will see either state default, or hyper inflation. Govt. have been intervening for 3 years. Could you explain how 1.2million in arrears on their mortgages will morph into either state default or hyperinflation please? Put your numbers on it and the mechanism. Spouting irrational nonsense just makes you look like an idiot. Quote Link to comment Share on other sites More sharing options...
Tired of Waiting Posted July 17, 2011 Share Posted July 17, 2011 Time to let market mechanisms work. What's fair about the prudent bailing them out? I wonder how many MEW'd in the good times? Maybe this could be an additional criterion about who receives help. + 1 Quote Link to comment Share on other sites More sharing options...
R K Posted July 17, 2011 Share Posted July 17, 2011 "However, the position can be ameliorated as lenders work with borrowers and come up with innovative schemes to allow them to remain in their homes in the short term or even long term." what is innovative about money lending?? Lying seems to be the answer...Lying about the value of the pledged asset, lying about the amount of government support the lender is receiving, lying about the arrears of the borrower. LIAR LOANS go way way further than the signature on the Income statement. Wonder how many of those 760,000 are BTLers? No need for any forbearance there. For family homes the govt. could 'nationalise' the arrears. i.e. debt for equity swap on those 1.2million properties and charge rent. Many of them will be mortgaged to state owned banks anyway. Probably similar numbers to the deficiency in council housing which is needed. (finger in the air). Total cost probably a couple of £billion tops. Quote Link to comment Share on other sites More sharing options...
Bob Loblaw Posted July 17, 2011 Share Posted July 17, 2011 There is the danger that because so many are now in trouble that special measures will be introduced to ensure there is no mass repossessions which would be very damaging politically to whoever is in government at the time. Personally I see prices slowly falling with no major crash to occur (we have already had the 30% off peak) as governments do whatever is required to protect 'homeowners'. I fear most on here are waiting for an 'event' that just will not occur. Quote Link to comment Share on other sites More sharing options...
LuckyOne Posted July 17, 2011 Share Posted July 17, 2011 The NBER defines household financial distress as "being unemployed (respondent or spouse), being more than two months behind on mortgage payments, or having a home valued at less than the mortgage". By this measure, nearly 1/5th of US households are in financial distress according to this slightly dated report up from a bit over 1/10th when the housing market began to turn. http://www.nber.org/aginghealth/2010no3/w16407.html It appears that about 1/10th of UK households are in financial distress on a narrower measure and as many as 1/5th are in distress on a broader measure : http://www.guardian.co.uk/money/2011/jul/13/households-financial-difficulty While in no way scientific, my interpretation is that UK households are in as much financial distress as US households. The inevitable conclusion is that the UK housing market is due for as large a proportional price adjustment as the US has already experienced. The bulk of the difference in timing has to do with the relative efficiency of the two markets in dealing with their shadow inventory of houses that are for sale in economic terms even though they aren't on the market. While not directly comparable, these made for quite interesting reading : http://www.bankofengland.co.uk/publications/quarterlybulletin/qb100408.pdf http://www.nottingham.ac.uk/cfcm/documents/papers/09-03.pdf Quote Link to comment Share on other sites More sharing options...
guitarman001 Posted July 17, 2011 Share Posted July 17, 2011 There is the danger that because so many are now in trouble that special measures will be introduced to ensure there is no mass repossessions which would be very damaging politically to whoever is in government at the time. Personally I see prices slowly falling with no major crash to occur (we have already had the 30% off peak) as governments do whatever is required to protect 'homeowners'. I fear most on here are waiting for an 'event' that just will not occur. +1. Folks here say it wont happen, but I think it will. Debt written off for those in trouble, while we sit on the sidelines and talk quietly about it on HPC, shafted for the last time as we log off to go to bed. Quote Link to comment Share on other sites More sharing options...
LuckyOne Posted July 17, 2011 Share Posted July 17, 2011 There is the danger that because so many are now in trouble that special measures will be introduced to ensure there is no mass repossessions which would be very damaging politically to whoever is in government at the time. Personally I see prices slowly falling with no major crash to occur (we have already had the 30% off peak) as governments do whatever is required to protect 'homeowners'. I fear most on here are waiting for an 'event' that just will not occur. +1. Folks here say it wont happen, but I think it will. Debt written off for those in trouble, while we sit on the sidelines and talk quietly about it on HPC, shafted for the last time as we log off to go to bed. We get back to shindigger's excellent question about taking on some debt as a hedge against a debt jubilee even if we don't need to borrow money at all as a way to protect our position in the capital structure. We are in scary times when this is a problem that people are even thinking about. Quote Link to comment Share on other sites More sharing options...
NEO72 Posted July 17, 2011 Author Share Posted July 17, 2011 There is the danger that because so many are now in trouble that special measures will be introduced to ensure there is no mass repossessions which would be very damaging politically to whoever is in government at the time. Personally I see prices slowly falling with no major crash to occur (we have already had the 30% off peak) as governments do whatever is required to protect 'homeowners'. I fear most on here are waiting for an 'event' that just will not occur. I do find this line, which is trotted out here on a regular basis amusing. How exactly do you define 'mass' repossessions? I'm asking because Gordon Brown in the year before an election and in the midst of a final spending splurge still 'allowed' 46,000 repos, the highest level since 1995. And one of the Tories first acts on getting in was halving the rate of SMI - not something you'd particularly associate with a government who will do anything to protect homeowners. I would suggest the reason we don't have more repossessions is that financially, it makes more sense for lenders to keep borrowers on the hook. The danger is that once prices fall sufficiently, the incentive to even attempt to service the loan diminishes and people simply walk away. The other danger is that once lenders see no way back up for prices, they cut their losses and end their forebearance, before things get any worse - I read somewhere (possibly here) that if you are going to panic, make sure you panic first. Quote Link to comment Share on other sites More sharing options...
jammo Posted July 17, 2011 Share Posted July 17, 2011 They are still referred to as "homeowners" in the article, not "mortgage payers" as the OP title suggests. Just wanted to highlight this blatant misnomer which permeates the MSM. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted July 17, 2011 Share Posted July 17, 2011 They are still referred to as "homeowners" in the article, not "mortgage payers" as the OP title suggests. Just wanted to highlight this blatant misnomer which permeates the MSM. they are homeowners. they are also debt holders and mortgage payers. Without ownership, there could be no mortgage. Quote Link to comment Share on other sites More sharing options...
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