spyguy Posted October 22, 2012 Share Posted October 22, 2012 Subs only. If you don't have one then I can get my man to send to info to your man. toodlepip. Fears rise of mortgage ticking time bomb. http://www.ft.com/cms/s/0/d83672d4-19d9-11e2-a179-00144feabdc0.html#axzz29d2db7Bk I didn't realise that 40% of mortgages were IO. Really in the sh1tter then. Warning bear similarity to endowment scandal http://www.ft.com/cms/s/0/c0dfdd5e-19d5-11e2-a179-00144feabdc0.html#axzz29d2db7Bk 75% of loans sold in 2007 were IO. Think Id here it before still shocking. House price capital repayment crash? Quote Link to comment Share on other sites More sharing options...
benbfc Posted October 22, 2012 Share Posted October 22, 2012 Interesting Spy. Over the last couple of months it appears that a growing number of people are waking up to just how knackered our economy is looking in the medium term. Another few months of 'bad news' making its way into the press will only increase the numbers - IMO what we need early part of next year is a decent report to find its way to the more widely read newspapers stating big falls in HPs this year to really set a panic off. The north is already showing good falls in 2012 in the less trendy areas and 2013 'could' be the year! Another 9 months to sit and wait I think! Quote Link to comment Share on other sites More sharing options...
eric pebble Posted October 22, 2012 Share Posted October 22, 2012 Subs only. If you don't have one then I can get my man to send to info to your man. toodlepip. Fears rise of mortgage ticking time bomb. http://www.ft.com/cms/s/0/d83672d4-19d9-11e2-a179-00144feabdc0.html#axzz29d2db7Bk I didn't realise that 40% of mortgages were IO. Really in the sh1tter then. ...///.... 75% of loans sold in 2007 were IO. Think Id here it before still shocking. House price capital repayment crash? Total insanity..... Quote Link to comment Share on other sites More sharing options...
Lord D'arcy Pew Posted October 22, 2012 Share Posted October 22, 2012 (edited) Total insanity..... I remember when it was called the Miracle Economy. Binge debt, I soon expect to see the participants face down in their own sick mortgage paperwork. Edited October 22, 2012 by Lord D'arcy Pew Quote Link to comment Share on other sites More sharing options...
easy2012 Posted October 22, 2012 Share Posted October 22, 2012 Warning bear similarity to endowment scandal http://www.ft.com/cms/s/0/c0dfdd5e-19d5-11e2-a179-00144feabdc0.html#axzz29d2db7Bk 75% of loans sold in 2007 were IO. Think Id here it before still shocking. House price capital repayment crash? Given how things go in recent years, the government will bail these homeowners out (modification, or whatever).. Quote Link to comment Share on other sites More sharing options...
FIGGY Posted October 22, 2012 Share Posted October 22, 2012 (edited) Cant see it going the miss sleiing route for one simple reason liar loans If miss selling kicks of I can see the lenders pointing to the fact that most of those people inflated their earnings and if they dont drop the case they will go after them for fraud. If I were the banks thats what I would do. Edited October 22, 2012 by FIGGY Quote Link to comment Share on other sites More sharing options...
Jail Them All Posted October 22, 2012 Share Posted October 22, 2012 Cant see it going the miss sleiing route for one simple reason liar loans If miss selling kicks of I can see the lenders pointing to the fact that most of those people inflated their earnings and if they dont drop the case they will go after them for fraud. If I were the banks thats what I would do. Obtaining by deception? Quote Link to comment Share on other sites More sharing options...
The Masked Tulip Posted October 22, 2012 Share Posted October 22, 2012 IO mortgages explain the ludicrous asking prices - basically people wanting you to pay their mortgage off and to allow them to have another 100% as a lump sum. If 40% are IO then this explains a great deal. Quote Link to comment Share on other sites More sharing options...
winkie Posted October 22, 2012 Share Posted October 22, 2012 Obtaining by deception? They shouldn't have lent it to me Sir it has driven me into poverty.....I need my compensation, please pay it directly into my bank account. Quote Link to comment Share on other sites More sharing options...
koala_bear Posted October 22, 2012 Share Posted October 22, 2012 Cant see it going the miss selling route for one simple reason liar loans If miss selling kicks of I can see the lenders pointing to the fact that most of those people inflated their earnings and if they dont drop the case they will go after them for fraud. If I were the banks thats what I would do. +1 Mortgages are a very different beast to PPI. They will have signed a contract which will include a clause stating that they have read and understood the T&C (which the banks etc will have kept copies of ), a solicitor and probably a mortgage broker (if it was an IO liar loan) will have been involved in the transaction too. If they then stand up and and try to claim mis-selling then in most cases wouldn't have a leg to stand on. If the banks manage to get convictions for fraud on some of the first cases that come up it will kill virtually all mis-selling claims. Quote Link to comment Share on other sites More sharing options...
koala_bear Posted October 22, 2012 Share Posted October 22, 2012 They shouldn't have lent borrowed it to from me Sir it has driven me the bank into poverty.....I our shareholders or taxpayers need my compensation, please pay it directly into my the bank account. A few corrections Quote Link to comment Share on other sites More sharing options...
koala_bear Posted October 22, 2012 Share Posted October 22, 2012 If 40% are IO then this explains a great deal. And if 75% in 2007 were IO then that explains even more. 2007 prices based on ability to tell porkies not ability to (re)pay. But prices still to similar to 2007 levels in many parts of the country still but transaction volumes similar to those that could actually afford to honestly pay in 2007... Quote Link to comment Share on other sites More sharing options...
Jail Them All Posted October 22, 2012 Share Posted October 22, 2012 75% of loans sold in 2007 were IO. A clear indicator that mortgage brokers knew that in terms of affordability, the numbers capable of taking out a repayment mortgage had diminished considerably, therefore, their only chance of hitting targets was to squeeze the last desperate drop out of people who would be fully stretched. And the banks allowed it! When taking out a mortgage, it amazes me that the amount of people who are focussed on the 'dream' rather than the consequences of their actions. They don't even shop around for mortgage rates!! Their mind is in B&Q, DFS and IKEA whilst they sign the papers. Quote Link to comment Share on other sites More sharing options...
benbfc Posted October 22, 2012 Share Posted October 22, 2012 Does anyone know a rough distribution of when these IO mortgages will end? I imagine a large % will have already ended and renewed - it would be good if a large % ended in the next 12 months then the excrement will hit the fan!!! Quote Link to comment Share on other sites More sharing options...
Spork of Damocles Posted October 22, 2012 Share Posted October 22, 2012 Does anyone know a rough distribution of when these IO mortgages will end? I imagine a large % will have already ended and renewed - it would be good if a large % ended in the next 12 months then the excrement will hit the fan!!! The CML data is a good place to start, although anything that matures past 2020 seems to be all lumped in together. I'd guess that, based on the figures so far, you have something that looks like the left side of a broad, normal distribution to the year 2032, then a drop-off after that, but probably nowhere near as steep as it needs to be until you get to anything maturing after 2037. We also have the effects of forebearance to factor in, as that has increased the stock of mortgages that are now effectively IO-only (although they should in principle be restored to repayment on an extended term or foreclosed at some point in the future). Quote Link to comment Share on other sites More sharing options...
winkie Posted October 22, 2012 Share Posted October 22, 2012 Does anyone know a rough distribution of when these IO mortgages will end? I imagine a large % will have already ended and renewed - it would be good if a large % ended in the next 12 months then the excrement will hit the fan!!! They don't end that is the point.....they can only sell to downsize if they have built up enough equity and didn't top up income by borrowing more of the equity whilst they still had a paying job, any negative equity still has to be paid for......or if old enough spend what is left of the house completely. Quote Link to comment Share on other sites More sharing options...
eric pebble Posted October 22, 2012 Share Posted October 22, 2012 (edited) Cant see it going the miss sleiing route for one simple reason liar loans If miss selling kicks of I can see the lenders pointing to the fact that most of those people inflated their earnings and if they dont drop the case they will go after them for fraud. If I were the banks thats what I would do. Despite the fact that THEY perpetrated the whole system -- all backed up by so-called "Mortgage Backed Securities" [MBS's]...... A hugely ironic mismomer of course.... [see all below]. Edited October 22, 2012 by eric pebble Quote Link to comment Share on other sites More sharing options...
Nationalist Posted October 22, 2012 Share Posted October 22, 2012 The plan seems to be that you buy your house with an enormous IO mortgage, you then pay the interest using Tesco 1.99% financing using a/ your salary while working, and b/ equity release when retired, then when you die the house gets sold and clears the mortgage. It's a Ponzi scheme but with a wide generational gap - could take a century to collapse. Quote Link to comment Share on other sites More sharing options...
spyguy Posted October 22, 2012 Author Share Posted October 22, 2012 Now i've woken up a bit and the coffee has reached my fingertips I can clarify my original post. 40% of existing mortgages are IO only. I guess that would include some endowments but frankly I would have expected anyone with a post 1987 endowment to have switched fully or partially to a repayment mortgage. Of course that is in a sane world . . . 75% of mortgage sold in 2007 were IO only. Distribution? Jeez everywhere. I would guess that IO mortgage counted for more than 50% of mortgage sold up to about 2011. As an example, at the grand old age of 48 a pub buddy 'bought' his first house in 2007. September . I know, I know. From memory, a joint income of around 30K, maybe 35k at a push. Mortgage for . . . 160k - for the slow of calculating thats over 5 times joint. Interest bit costing him around 700/month. They struggled to pay the interest bit; they've already missed a number of payments. He's lost his job. Mortgage is at 12 times her salary. They did stub up a fair old deposit - about 40K - but I doubt they have any equity left. So must the bank or otherwise they would have started repo-ing. His mortgage is with the Skipton BS. Shame we can't short them. His mortgage was sold via an FSA. Here's the bit where the issue get's murky. Buy not using their in-house people the banks have a bit of wiggle room. Bear in mind banks uses FSA/advisors to increase sales capacity rather than a ploy to avoid future mis-selling claims - remember its only in the last year or so that banks have been obliged to check the person can pay back the mortgage. Now it might be expensive as this will end up in court. But I'm glad I don;t have any exposure to FSA's indemnity insurance providers. Anyhow, at the grand old age of 53ish he's decided that he's worked hard enough, for too long (he's not; he's a work-shy t.sser). And he likes the idea of early retirement - despite owing 160K and having no pension. Quote Link to comment Share on other sites More sharing options...
durhamborn Posted October 22, 2012 Share Posted October 22, 2012 Subs only. If you don't have one then I can get my man to send to info to your man. toodlepip. Fears rise of mortgage ticking time bomb. http://www.ft.com/cms/s/0/d83672d4-19d9-11e2-a179-00144feabdc0.html#axzz29d2db7Bk I didn't realise that 40% of mortgages were IO. Really in the sh1tter then. Warning bear similarity to endowment scandal http://www.ft.com/cms/s/0/c0dfdd5e-19d5-11e2-a179-00144feabdc0.html#axzz29d2db7Bk 75% of loans sold in 2007 were IO. Think Id here it before still shocking. House price capital repayment crash? All IO mortgages should be classed as renting.Very few will have any kind of repayment savings going.Most thought it was a way of getting "on the ladder".Just wait until all these millions get close to retirement with huge morgages still to pay.Wont be long before they reform SMI i would think.Most will have negative equity as well,probably for the full term of the mortgage. Once the government bring in the new £140 a week pension and no means tested top ups a lot of people will see all any extra pension they have going to the banks.So the banks get the house and the pension. Amazing how bubbles make people do things that ruin them for the rest of their lives. Quote Link to comment Share on other sites More sharing options...
Nationalist Posted October 22, 2012 Share Posted October 22, 2012 Anyhow, at the grand old age of 53ish he's decided that he's worked hard enough, for too long (he's not; he's a work-shy t.sser). And he likes the idea of early retirement - despite owing 160K and having no pension. I'm liking the cut of his jib! Obviously 'disability' is the way to go - bad back? That will pay his living costs. Car on motability. Mortgage will be handled by forbearance plus SMI plus benefits. A little light cash-in-hand work to ice the cake with; I hear baccy smuggling pays well and scroungers don't care if they get a criminal record - they are never going to be showing their CVs to anyone. Any sprogs? It's never too late to start. They are good for CB plus HB plus tax credits for the missus. Quote Link to comment Share on other sites More sharing options...
Jail Them All Posted October 22, 2012 Share Posted October 22, 2012 The majority of people who took out these mortgages weren't thick, neither were those that MEW'd, they just followed the flock into something which would always see them right at the end of the day. They saw other normal workers with their fancy cars and holidays and wanted a piece of the action. All would have been to plan if the bubble would have continued as expected, but they didn't even contemplate it bursting. The stark realisation of their position now is slowly dawning on those who are not afraid to face the truth, but many have put all of their eggs in one basket, and are adamant that they will not sell for a penny less than what their expectations were, as that will scupper their master plan. Some are beginning to feel real fear as they go into their 50's and 60's in negative equity, with no earning power, and a huge asset debt that they cannot sell. The top cannot downsize and the bottom cannot upsize. No new money coming into the ponzi, A house is the biggest asset the majority of people will ever buy, when that goes t!ts up, it will be the ruination of hundreds of thousands. Don't forget human nature - people only tell you when things are going well - look out for the gloomy worried faces around the office where once there was a chirpy soul. Those without a repayment vehicle are simply paying for the privilege of occupying the premises until the end of the mortgage term. They will have nothing to pass down to give the next generation a leg up. Scary. Quote Link to comment Share on other sites More sharing options...
ncw0505 Posted October 22, 2012 Share Posted October 22, 2012 A point of clarification - according to the FT article, IO loans in fact account for 'only' 40 per cent of the UK's mortgage book, although whether that's by number or value is unclear. However, in 2007, apparently one-third of new mortgages, not 75 per cent, was sold on an IO basis, and of that one third, 75 per cent was sold without a reported payment plan. This implies that roughly 25 per cent of ALL mortgage loans made in 2007 had no repayment vehicle. There appears something of a disconnect between IO amounting to 40 per cent of the UK's total mortgage book and yet forming 'just' 33 per cent of lending at the peak of the market frenzy in 2007 which more learned people may be able to readily explain. Quote Link to comment Share on other sites More sharing options...
Executive Sadman Posted October 22, 2012 Share Posted October 22, 2012 Next liebour govt will probably let everyone with an IO mortgage off the hook, mis-selling or something. How something as unambiguously named as 'interest only' could be mis-selling I dont know, but i suppose Labours education legacy is half the country illiterate. Quote Link to comment Share on other sites More sharing options...
winkie Posted October 22, 2012 Share Posted October 22, 2012 Sounds like a good plan as he will be far better off than working cash wise, and get to keep the house, ie none of this s21 move in two months nonsense. Other choice is work, sell the property and then rent .... difficult decision. Nah....the sprogs will be living in any spare rooms, if not they will be rented out to pay the interest payments forever due. Quote Link to comment Share on other sites More sharing options...
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