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£100Bn Mortgage Debt Forgiveness - Telegraph


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www.telegraph.co.uk/finance/newsbysector/banksandfinance/9594899/Financial-regulation-new-frontline-for-growth.html

There is only big caveat, though. Taking the hit would wipe out so much capital the banks would need to go back to shareholders, or the taxpayer, cap-in-hand to demand another bailout.

Edited by billybong
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they could always foreclose on defaulters.

cash buyers would move in on the scene....people would move around.

or, they could pass a law...everyone stays where they are, whatever their financial situation..renters, roomers, mortgage holders...whoever. Ban evictions for non payment.

we could ALL default then.

I like the sound if that :D

we could have party and give each other a jolly good slap on the back

Edited by Patfig
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Although the homeowner would still in theory have the same principal loan to repay, the cost of servicing it would be lower – thereby reducing the effective debt. It would be forgiveness in another guise.

And the borderline default high risk borrower (sub-prime?) suddenly becomes prime and able to help "stimulate" the economy again :rolleyes:

Edited by billybong
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I turned bear in 2002. I was sure the property market had to crash, it was a bubble, clearly.

In late 2003 I went for the STR option.

Boy, have I learned a thing or two about property and the UK market since then.

The main thing I have learned is, 'don't be the only one out of step in the army'

The government and PTB will do any amount of dropping money from helicopters to help the majority of their voters, you can be sure of that.

My strategy is now to borrow as much as possible at the lowest IR possible. Rates aren't going up for a few years. And there is always an off chance of a bailout further down the line...

The Funding for Lending scheme injects up to 80BN into the mortgage market for the next 4 years. That spans the next election. I predict that if things get shaky, they can increase the size of this scheme, provided banks are seen to take it up.

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snip

The Funding for Lending scheme injects up to 80BN into the mortgage market for the next 4 years. That spans the next election. I predict that if things get shaky, they can increase the size of this scheme, provided banks are seen to take it up.

you cant push on a string.

In 2002, the banks hid the reality of the "wall of money" from everyone...regulators, the Bank of England, Everybody.

People were and are still being sucked into an unburst Ponzi.

Today, they are more open about the dealings...but what we dont know is going to be truly amazing when we do find out.

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My strategy is now to borrow as much as possible at the lowest IR possible. Rates aren't going up for a few years. And there is always an off chance of a bailout further down the line...

The Funding for Lending scheme injects up to 80BN into the mortgage market for the next 4 years. That spans the next election. I predict that if things get shaky, they can increase the size of this scheme, provided banks are seen to take it up.

20% of shit pie still tastes like shit. If you want a real piece of a real pie then emigrate.

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The Funding for Lending scheme injects up to 80BN into the mortgage market for the next 4 years. That spans the next election. I predict that if things get shaky, they can increase the size of this scheme, provided banks are seen to take it up.

This really is a massive issue that should be getting more discussion here than it is IMO. See today's RICS report - expectations are that FFL will have a growing impact, putting a floor under current prices. Since most of the money is going to the equity rich already when they remortgage, I expect the prices of family homes to increase. How long is this going to take to work through the system? We are talking years here. It has the potential to not just stall an HPC but put into reverse... :ph34r:

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The Bank has estimated that as much as 8pc of UK mortgages are in forbearance, equivalent to about £100bn of debt. On commercial real estate loans, it reckons a third are in forbearance – or roughly £75bn.

So there's only 225B of commercial real estate loans in total made by UK banks? That number sounds way too low.

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Are people still believing this ridiculous idea that banks can write down mortgages?

They'll need bailing out again if they do that.

Default on debt means default on savings and pensions.... when are people going to understand this?

so its OK to buy a shell company, with money they dont have, sell the possessed home to the shell and show the debt gone, and the money as an asset in the Shell?

But not to write off the debt.

I see.

One way is Ok and looks good on the books, as the losses will be off balance sheet for some while, the other, honest way, shows a loss, but the reality is the same.

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cash buyers would move in on the scene....people would move around.

Who would the cash buyers be?

There are only a small minority of STR's. I would hazard a guess that there are only a small minority of those who held back from purchasing because they thought prices were unsustainable. Most who wanted to buy bit the bullet and took advantage of generous lending multiples from the banks, special schemes from builders and the bank of mum and dad.

Mortgage lending will probably remain restricted because the lenders won't have the capital available after taking the losses HPC would cause.

My speculation is the cash buyers will be property investors who will buy up what they can and rent them out.

I doubt whether those wanting to buy will be able to complete with the speed of professional property investors.

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so its OK to buy a shell company, with money they dont have, sell the possessed home to the shell and show the debt gone, and the money as an asset in the Shell?

But not to write off the debt.

Your example is mathematically ridiculous. :huh::blink:

I expect better from you of all people. :o:rolleyes:

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Given their policy on making work pay does anyone really think the Tories would allow a massive handout to what would in the majority be Labour voters? Middle class person A struggles to make ends meet and pay the mortgage. Chav B defaults and the government allows him a free pass out while leaving A to struggle. Can't see it myself.

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Are people still believing this ridiculous idea that banks can write down mortgages?

They'll need bailing out again if they do that.

Default on debt means default on savings and pensions.... when are people going to understand this?

Some of us do....

Those savings and pensions are probably toast anyway.

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Your example is mathematically ridiculous. :huh::blink:

I expect better from you of all people. :o:rolleyes:

looks great on a balance sheet though.

Mortgage ...£100K cant pay.....option write it off and sell the house in firesale

option 2.

Take 100K...invest in shell....now bank has asset of £100K

shell buys house...repays mortgage....

bank now has no bad debt, its risk is gone, and the 100K asset.

The shell has nothing.

see?

This is the magic of off balance sheet dealings.

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looks great on a balance sheet though.

Mortgage ...£100K cant pay.....option write it off and sell the house in firesale

option 2.

Take 100K...invest in shell....now bank has asset of £100K

shell buys house...repays mortgage....

bank now has no bad debt, its risk is gone, and the 100K asset.

The shell has nothing.

see?

This is the magic of off balance sheet dealings.

Looks too easy.

I'm off for a think...

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Looks too easy.

I'm off for a think...

It is easy...its technically a scam....ie, there is no arms length detachment from the deal to the mortgage holder...if they underpay, then there is every chance of the bank losing a court case as the house wasnt marketed to get the best possible price.

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Given their policy on making work pay does anyone really think the Tories would allow a massive handout to what would in the majority be Labour voters? Middle class person A struggles to make ends meet and pay the mortgage. Chav B defaults and the government allows him a free pass out while leaving A to struggle. Can't see it myself.

I don't buy your premise that the people who bought at the peak of the bubble are natural Labour voters. When the London bubble bursts there are going to be plenty of Tarquins and Tamaras up to their eyeballs in negative equity.

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http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9594899/Financial-regulation-new-frontline-for-growth.html

This is a complicated article which I don't fully understand - but towards the end it seems to be saying there's moves behind the scenes to forgive £100bn of mortgage debt in a last desperate attempt to get the economy moving - entailing another bailout - oops.......

quote

..in the article it states:

UK banks are holding vast hidden losses on their books.

...surely this is fraud according to the stock exchange rules ...and does it not point to the continuing incompetence of both the FSA and the Bank of England.....?..... :rolleyes:

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Are people still believing this ridiculous idea that banks can write down mortgages?

They'll need bailing out again if they do that.

Default on debt means default on savings and pensions.... when are people going to understand this?

Default on pensions is already a problem for those who've tried to retire since 2009 and QE.

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Who would the cash buyers be?

There are only a small minority of STR's. I would hazard a guess that there are only a small minority of those who held back from purchasing because they thought prices were unsustainable. Most who wanted to buy bit the bullet and took advantage of generous lending multiples from the banks, special schemes from builders and the bank of mum and dad.

Mortgage lending will probably remain restricted because the lenders won't have the capital available after taking the losses HPC would cause.

My speculation is the cash buyers will be property investors who will buy up what they can and rent them out.

I doubt whether those wanting to buy will be able to complete with the speed of professional property investors.

Potential cash buyers include those of us who've saved a few quid since Not Buying in 2005.

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  • 439 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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