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Morgage bailout in the event of a crash?


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17 minutes ago, Andy T said:

I believe this is just a 90's myth - there was no 'handing back the keys and all was forgiven'  there was a debt to be repaid, default, repossession and credit history ruined.

I have first hand experience in the 90's........i know of people who did exactly just that......it was not like in certain states in the US where you can walk away clean...this was not the case but if you had no assets to pursue and made that clear and they couldnt find evidence to the contrary they would let it slide without pursuing you into bankruptcy...there simply was no point and it was not an uncommon situation for those who bought in at peak in circa 88/89....relationships gone south all the usual...

There was advice at the time that around i think 6 years the lender may try to contact you....DO NOT RESPOND..somehow it reset the debt....i know several who handed back keys voluntarily others repo'd...some managed to buy ex partners out and carry on with negative equity...

In the US they had a term for it..."jingle mail" due to the envelopes being sent in with keys....one thing people need to know in the UK every mortgage is a full recourse mortgage....not in many states in the US where state law makes the lender responsible for having made the loan and the mortgage holder can walk away scot free....and they did in 2008...often to buy another house down the street half price months later..no damage to credit score....Banks do not want property responsibilities...they want shot of pronto...if that means making a new mortgage with another banks clients who walked away they will at least in the states.....

The Uk full recourse mortgage is a *********r and most people have no idea of the implictions.....from the french mortgage...to death or repayment

 

just to add although i know several who never made up the shortfall and never went bankrupt...i do not know what impact that had on their credit file

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1 hour ago, Andy T said:

I believe this is just a 90's myth - there was no 'handing back the keys and all was forgiven'  there was a debt to be repaid, default, repossession and credit history ruined.

Its a mangled understanding.

The US *does* have no recourse lending for prime mortgages. cant pay? Hand the keys back.

The UK does not. Cant pay? OK ,well take the house and pursue any assets youve got, which can include a DV pension.

It seems to be the same sort of dumb legal understanding as 'common law wife'. In fact, I hear the both being used from the same sort of people.

The #1 IO BLT I know thins he can hand the key back.

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Last time I remember them saying we're all in it together whilst the banking sector was seemingly rewarded.

Wouldn't this time it be more likely the banks just bail in, so as to absorb any losses?  Just plunder other peoples rainy day funds, like they did with low interest rates in the last crisis and so kick the can further down the road.

 

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9 hours ago, Spindler said:

 

in the 90's those who made it through had a golden time ahead of rising prices and falling rates(of course they didnt know that)......I do not see that ahead for todays leveraged crowd....they don;t even have wage inflation....I more than tripled my earnings between 92 and 2002.....

I've had pay rises due to inflation each year since I started work almost a decade ago. I've had pay rises due to seniority/performance/promotions as well. I would have thought the majority will have both.

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i'm afraid you are wrong.....you havent spent enough time in the workforce and your memory doesnt go back far enough...the reason its happened for you is because you were just starting out.....salaries stopped dead over a decade ago for mid level/exec roles and have probably got worse for the lesser roles....a lot of millenials can't even get a full time role..zero hours etc...gig economy...average wages is 27k i was earning not far off that in the 80's and a lot more in the 90'.....roles i look at now are paying same as they were 2006.....

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The sittuation cannot be compared to the nineties crash in my opinion. Firstly, the tories believe that the 90s crash was the real reason the electorate resented them for over a decade and voted for tony blair. The lesson learned from history is that a housing crash must be prevented at all costs, we can see this with HTB and the like. Secondly, the economic and political situation  is different from the early nineties. Since globalisation, debt has been the only way to keep the western feeling of prosperity going, with property the main vehicle. Letting a property crash happen would blow a hole in this strategy, and politicians dont have another one. It is also obvious through brexit, trump, yellow vests and the like, the populations of western nations are both more insecure and contemptous  of politicians than than the 90s. I think the elite are more frightened of upsetting them now. 

 

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1 hour ago, nothernsoul said:

The sittuation cannot be compared to the nineties crash in my opinion. Firstly, the tories believe that the 90s crash was the real reason the electorate resented them for over a decade and voted for tony blair. The lesson learned from history is that a housing crash must be prevented at all costs, we can see this with HTB and the like. Secondly, the economic and political situation  is different from the early nineties. Since globalisation, debt has been the only way to keep the western feeling of prosperity going, with property the main vehicle. Letting a property crash happen would blow a hole in this strategy, and politicians dont have another one. It is also obvious through brexit, trump, yellow vests and the like, the populations of western nations are both more insecure and contemptous  of politicians than than the 90s. I think the elite are more frightened of upsetting them now. 

 

They have however painted themselves into a corner, prices can go up no more without allowing greater income-multiple mortgages than now and lowering real rates.

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7 hours ago, TwoWolves said:

They have however painted themselves into a corner, prices can go up no more without allowing greater income-multiple mortgages than now and lowering real rates.

50 year, (ie potentially intergenerational)  mortgages as with Japan late-80s..?

Terms have already risen in some instances have they not to 40 years? And we've followed the Japanese model of economy zombification so far - why stop now?

 

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8 hours ago, nothernsoul said:

The sittuation cannot be compared to the nineties crash in my opinion. Firstly, the tories believe that the 90s crash was the real reason the electorate resented them for over a decade and voted for tony blair. The lesson learned from history is that a housing crash must be prevented at all costs, we can see this with HTB and the like. Secondly, the economic and political situation  is different from the early nineties. Since globalisation, debt has been the only way to keep the western feeling of prosperity going, with property the main vehicle. Letting a property crash happen would blow a hole in this strategy, and politicians dont have another one. It is also obvious through brexit, trump, yellow vests and the like, the populations of western nations are both more insecure and contemptous  of politicians than than the 90s. I think the elite are more frightened of upsetting them now. 

 

i think you're crediting them with too much thought...even if you are correct....its such a stupid track to press on beyond all sense......and very soon after HTB etc and OSbourne's ""nice little housing boom"  they find themselves having lost the renter class vote and young vote as their core voter base is dropping like flies every year......those who have no stake in the ponzi scheme that is UK property would gleefully throw fuel on the fire when it all burns down.....AND THAT IS AN INCREASING AMOUNT OF PEOPLE......thats why the leveraged BTL so oft debated on this site are being thrown under the bus.....RENTERS DONT' VOTE TORY

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  • 433 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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