Jump to content
House Price Crash Forum
APerson

Morgage bailout in the event of a crash?

Recommended Posts

I've been thinking:

In the event of a crash leading to mass unemployment and/or substantial interest rate increase rises many people would fail to be able to make their morgage payments. House prices would also crash which would lead many to go into negative equity.

At this point would the government be under pressure to step in and start to bail out home owners or put restrictions on the banks reposessing houses?

If this is the case is it a good idea to enter into the housing market before a crash inorder to benefit from a bailout?

Share this post


Link to post
Share on other sites
58 minutes ago, APerson said:

I've been thinking:

In the event of a crash leading to mass unemployment and/or substantial interest rate increase rises many people would fail to be able to make their morgage payments. House prices would also crash which would lead many to go into negative equity.

At this point would the government be under pressure to step in and start to bail out home owners or put restrictions on the banks reposessing houses?

If this is the case is it a good idea to enter into the housing market before a crash inorder to benefit from a bailout?

that's a big gamble....you could have bought Debenhams shares in the hope Mike Ashleys offer of a rescue had been accepted or maybe a better example would have been Carillion....as there were some big buys in the shares expecting the govt to bail it out as it was too big to fail....they let it FAIL.....

Many buyers ended up repossessed or in neg equity in the 90's ...THEY WERE NOT BAILED OUT..

Share this post


Link to post
Share on other sites

I don't think there will be any bailouts the house will end up in the social housing sector if repo'd you might be lucky and they let you be the tenant.....but you might be bankrupt as well

 

or you might be kicked out and made bankrupt..more likely

Edited by Spindler

Share this post


Link to post
Share on other sites

Why would a lender want to reposess a property that is falling?........they would probably charge the interest only, the debt still remains or the owner could hand back the keys to the 100% owner the lender as many did in the past.....lost a home, lost deposit and equity all up in a puff of smoke.....many walked away never to repay, some with young children got given a council home.;)

Share this post


Link to post
Share on other sites
21 minutes ago, Spindler said:

.....

Many buyers ended up repossessed or in neg equity in the 90's ...THEY WERE NOT BAILED OUT..

Yes but since the 90s successive govts have taken entirely opposite approach and supported homeowners wherever possible.

The 90s were toxic for the Tories BECAUSE they didn't bail out homeowners.

Share this post


Link to post
Share on other sites
15 minutes ago, Si1 said:

Yes but since the 90s successive govts have taken entirely opposite approach and supported homeowners wherever possible.

The 90s were toxic for the Tories BECAUSE they didn't bail out homeowners.

I suspect they are still primarily interested in protecting mortgage lenders than borrowers, but if that can be done by preventing borrowers from defaulting by near 0% rates then it serves the same purpose.

Share this post


Link to post
Share on other sites
1 hour ago, APerson said:

I've been thinking:

In the event of a crash leading to mass unemployment and/or substantial interest rate increase rises many people would fail to be able to make their morgage payments. House prices would also crash which would lead many to go into negative equity.

At this point would the government be under pressure to step in and start to bail out home owners or put restrictions on the banks reposessing houses?

If this is the case is it a good idea to enter into the housing market before a crash inorder to benefit from a bailout?

Forebearance is much more likely. The banks and other lending institutions will be under great pressure not to foreclose, to the point where finance will be made available to those institutions in order thsat they can continue in business.

Share this post


Link to post
Share on other sites

I cant  envisage there not being some kind of government bailout in the sittuation described above. The entire media from bbc, guardian, daily mail, would have front page stories of hard working middle class families losing their homes and becoming destitute. Forget climate change, threat of nuclear annhialation, that is really what sends the shivers through middle england. Any government would rightly would fear the fall out at the balot box. Secondly, politicians knee jerk reaction (particularly in an era like ours that lacks vision)  is to preserve the status quo, and house price inflation has been the status quo for 20 years. Finally, if the economy, employment, was spiralling downwards, along with houseprices, their would be a justified terror that the whole social contract would collapse.  

Share this post


Link to post
Share on other sites

but it wont end up in Joe Publics pocket.....they are determined to avoid that...that means trapped in a bad investment.....I'm  not sure they are going to be this kind ..i think the money will be made available to purchase that house at a fire sale price by a housing association or the council.....we have already had forebearance to a point as (demonstrated on this site by how they will brutally deal with a BTL in default)..i'm not sure forebearance to a massive degree is on the cards....as long as you pay you don't need forebearance anyway....the prob with neg equity is you are trapped if you cant pay it gets repo'd

 

Like many things(seen this in the 90's) its not that simple...wife/girlfriend runs off and stops paying their share....you can;t pay.....you are in a 3 legged race with someone you dont want to be with......you dont earn enough to buy them out.....banks and BS...will give forebearance but not for long......they or the govt dont' ever ever want to give Joe Public a break because they fear then people will shrug off their yokes.....bit like they don;t rreally want people understanding how they create money out of thin air...via debt notes

Share this post


Link to post
Share on other sites
10 minutes ago, nothernsoul said:

I cant  envisage there not being some kind of government bailout in the sittuation described above. The entire media from bbc, guardian, daily mail, would have front page stories of hard working middle class families losing their homes and becoming destitute. Forget climate change, threat of nuclear annhialation, that is really what sends the shivers through middle england. Any government would rightly would fear the fall out at the balot box. Secondly, politicians knee jerk reaction (particularly in an era like ours that lacks vision)  is to preserve the status quo, and house price inflation has been the status quo for 20 years. Finally, if the economy, employment, was spiralling downwards, along with houseprices, their would be a justified terror that the whole social contract would collapse.  

you just described the 1990's there was no bailout....they didn't even lower rates ..i was paying 8 plus percent which was going to go through the roof if we hadnt exited the EMU..where Soros made all his money betting against the BoE

 

And now they can barely lower the rates can they ? That firework has been used

Edited by Spindler

Share this post


Link to post
Share on other sites

The crash should have been 2009-2012ish but the government interfered to prevent/delay it, so you could argue it's already been bailed out...for now.

Share this post


Link to post
Share on other sites

As per the comment from crouch, if there is a bailout, it will be to the banks to allow that can to be kicked further down the road. Joe Schmo will get a "payment holiday" at most!

Share this post


Link to post
Share on other sites
1 hour ago, winkie said:

Why would a lender want to reposess a property that is falling?........they would probably charge the interest only, the debt still remains or the owner could hand back the keys to the 100% owner the lender as many did in the past.....lost a home, lost deposit and equity all up in a puff of smoke.....many walked away never to repay, some with young children got given a council home.;)

my first house in 92 was a repo i bought from the Abbey National with an abbey mortgage.....they will repo and sell at a loss ...you are responsible for the shortfall if they do....they want the risk off their books pronto and the responsibility for the house...houses not ocupied are a liability

Share this post


Link to post
Share on other sites
2 minutes ago, nightowl said:

The crash should have been 2009-2012ish but the government interfered to prevent/delay it, so you could argue it's already been bailed out...for now.

correct it was falling in 2008 already heavily....they prevented it 2009 on......i figure prices would have gone back to between 1999 and 2003 somewhere.....

Share this post


Link to post
Share on other sites
13 minutes ago, Spindler said:

And now they can barely lower the rates can they ? That firework has been used

They could nudge down to 0% or below. The other option is changing repossession payment holiday rules/laws or simply print money for the 99% as opposed to the 1% to create inflation to make mortgages appear smaller. A bit drastic the last one for all sorts of reasons!

Share this post


Link to post
Share on other sites
1 hour ago, crouch said:

Forebearance is much more likely. The banks and other lending institutions will be under great pressure not to foreclose, to the point where finance will be made available to those institutions in order thsat they can continue in business.

Yup, that's the usual way to rob the prudent and make them bailout the feckless.

Share this post


Link to post
Share on other sites
2 hours ago, winkie said:

Why would a lender want to reposess a property that is falling?........they would probably charge the interest only, the debt still remains or the owner could hand back the keys to the 100% owner the lender as many did in the past.....lost a home, lost deposit and equity all up in a puff of smoke.....many walked away never to repay, some with young children got given a council home.;)

win if you win and win if you lose. 

 

 

Share this post


Link to post
Share on other sites

The scenario of mass unemployment leading to a debt Jubilee is probably a decade plus into the future, bearing in mind this manure heap has taken 3 decades to fester.  By such time, The Establishment will not have an hardcore of Tory, Baby Boomers to shaft, but Generation Rent.  By the departing of the Boomer Generation, and the current gutting of the Tory Party, it will be a non-runner, or at the very least a llloooonnnnggg shot.

Share this post


Link to post
Share on other sites
1 hour ago, nightowl said:

They could nudge down to 0% or below. The other option is changing repossession payment holiday rules/laws or simply print money for the 99% as opposed to the 1% to create inflation to make mortgages appear smaller. A bit drastic the last one for all sorts of reasons!

i like it..but never going to happen they don;t want the proles muscling in on their racket.....you need to think of the elites like a mafia...they won;t do any favours for anybody apart from their own....who will reward them....think of osbourne and his 8 jobs inc editor of the evening standard for which he had zero experience or qualifications

Share this post


Link to post
Share on other sites
5 minutes ago, Spindler said:

i like it..but never going to happen they don;t want the proles muscling in on their racket.....you need to think of the elites like a mafia...they won;t do any favours for anybody apart from their own....who will reward them....think of osbourne and his 8 jobs inc editor of the evening standard for which he had zero experience or qualifications 

I agree up until now - but with the Brexit Party and Momemtum nipping at the heels of the neo-liberal centre is there a chance they would be forced to unless they face a populist backlash.

Share this post


Link to post
Share on other sites

We are seeing the warning signs of an iminent crash right now, like the beginning of someone sneezing - edging towards it but not quite there yet. I can't lie, as a young person in a secure line of work I would benefit greatly from a crash... and it would be very satisfying see the BTL fookers out there burn.

Share this post


Link to post
Share on other sites

for me and this has been said on sky believe it or not...the Brexit party has one goal and only one goal...and that in their words (SKY)is the genius...they are not trying to be an additional force in politics because evrytime someone has tried to  reduce the power of the big 2 PARTIES..it has come to nothing......Farage knows this...hence one goal ...get brexit over the line and then shut up shop....it could morph into something else but this is not the time...he knowS that

 

And its working in May he is going to with a brand new party embarrass the tories..no wonder they did everything they could to keep that man out of westminster...theyve seen what he has done with tusk ...juncker...barnier etc...they didnt want any of that...

Love him or loathe him the likes of Clegg ..May..Cameron ....couldnt and wouldnt want to debate the bloke....

 

We used to have a little 3rd party btw they were the Liberal party.....back a long time ago a century they were not so little and they actually did a lot of good for the common man......then they got in bed with David Cameron caught something nasty and their numbers were depleted to the point the whole number of their MP's could have got into a London Cab

Share this post


Link to post
Share on other sites
4 hours ago, APerson said:

I've been thinking:

In the event of a crash leading to mass unemployment and/or substantial interest rate increase rises many people would fail to be able to make their morgage payments. House prices would also crash which would lead many to go into negative equity.

At this point would the government be under pressure to step in and start to bail out home owners or put restrictions on the banks reposessing houses?

If this is the case is it a good idea to enter into the housing market before a crash inorder to benefit from a bailout?

Isn't there already support for people made unemployed - Support for Mortgage Interest (SMI)?  

I'm sure some kind of broader scheme could be concocted similar to this - aiming to "help" "hard working families" stay in their homes, but loading them up with more debt. Perhaps a Help to Buy or shared ownership kind of thing where the government or housing association takes up the negative equity but you end up paying off another loan or rent. 

Edited by Clarky Cat

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 297 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.