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The Government Prepare For A Housepricecrash!

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http://www.leedstoday.net/ViewArticle2.asp...ticleID=1510962

In light of the continuing rise in the number of repossessions, the questionable and somewhat arbitrary behaviour of lenders and the huge personal cost to borrowers, as well as the social costs to us all, the bill seeks to strengthen and rationalise the regulation of mortgage repossessions.

"The measures are all designed to strengthen the regulations so that innocent, hard-working people who have a temporary setback can be given every opportunity to keep the family home together and when appropriate and by agreement, make good on the default."

Mr Mudie's bill is listed for debate on July 14.

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I have to be honest here, the best thing if you have no job, and cannot afford to repay your mortgage is for the bank to repossess.

Having interest rolled up month on month endlessly is just putting off the inevitable.

The day you are issued with a bankruptcy order, your interest charge is halted. You can then start to get some money together for a rented place, as you will no doubt lose the property.

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There you go! These damn socialists intervening in the free market. How dare they, yadda yadda yadda.

How old Labour. Questioing cheap credit, and its consequences.

Sorry for plagarising the more right wing thinkers on here but I would say George Mudie is right.

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There you go! These damn socialists intervening in the free market. How dare they, yadda yadda yadda.

How old Labour. Questioing cheap credit, and its consequences.

Sorry for plagarising the more right wing thinkers on here but I would say George Mudie is right.

More like how Nu Labour, Questioning cheap credit but doing FA about it until its way too late. (even this will end up as all talk and no action mark my words)

p.s. l'm not stalking you honest. :)

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And I would say you are wrong.

If you are a young family and you shell out 1500pcm to live in a Studio Cr4p hole that you bought under the New Labour highly inflationary miracle economy, then the best thing you could do is drop it ASAP.

People who handed the keys back in the early parts of the last recession, were the winners in the end. Those that struggled to get through having four jobs, and working all the hours god gives came off worst.

Dump the property early in a recession when all the equity is eaten up in deflation, and then jump back in when the prices hit rock bottom.

Only a fool would hang onto a property worth 50K saddles with a 150k mortgage, when he could offload it back to the bank and return five years later to buy the same article at a fraction of the cost.

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So let's get this straight...

The stupid people who've lived irresponsibly get bailed out when the consequences bite them, while those of us who've been sensible and consequently done without get to continue doing without because what we should be inheriting is being artificially kept in the possession of those we should be inheriting it from, no doubt funded by tax that we're paying :angry:

It's perfectly summed up by this story which I was e-mailed by a friend a short while ago...

The Ant and the Grasshopper

CLASSIC VERSION:

The ant works hard in the withering heat all summer long, building his house and laying up supplies for the winter. The grasshopper thinks he's a fool, and laughs and dances and plays the summer away. Come winter, the ant is warm and well fed. The shivering grasshopper has no food or shelter, so he dies out in the cold.

THE END

THE BRITISH VERSION:

The ant works hard in the withering heat all summer long, building his house and laying up supplies for the winter. The grasshopper thinks he's a fool, and laughs and dances and plays the summer away. Come winter, the ant is warm and well fed.

The shivering grasshopper calls a press conference and demands to know why the ant should be allowed to be warm and well fed while others less fortunate, like him, are cold and starving.

The BBC shows up to provide live coverage of the shivering grasshopper, with cuts to a video of the ant in his comfortable warm home in Hampstead with a table laden with food.

The British are stunned that in a country of such wealth, this poor grasshopper is allowed to suffer so while others have plenty.

The Liberal Party, the Respect Party, the Transvestites With Starving Babies Party and the Coalition Against Poverty demonstrate in front of the ant's house. The BBC, interrupting a Rastafarian cultural festival special from Grimsby with breaking news, broadcasts them singing "We Shall Overcome."

The Lord Mayor of London, Ken Livingston laments in an interview with Panorama that the ant has got rich off the backs of grasshoppers, and calls for an immediate tax hike on the ant to make him pay his "fair share".

In response, the Labour Government drafts the Economic Equity and Grasshopper Anti-Discrimination Act, retroactive to the beginning of the summer.

The ant's taxes are reassessed, and he is also fined for failing to hire grasshoppers as helpers. Without enough money to pay the fine and his newly imposed retroactive taxes, his home is confiscated by Camden Council.

The ant moves to France, and starts a successful agribiz company [funded by the British via EU subsidies]. The BBC later shows the now fat grasshopper finishing up the last of the ant's food, though Spring is still months away, while the government house he is in, which just happens to be the ant's old house, crumbles around him because he hasn't bothered to maintain it.

Inadequate government funding is blamed; Diane Abbot is appointed to head a commission of enquiry that will cost £10m. The grasshopper is soon dead of a drug overdose, the Guardian blames it on the obvious failure of government to address the root causes of despair arising from social inequity.

THE END

Anyway... betta get myself down the bank quick smart for a ten times salary interest only mortgage so I can afford a studio flat... that's assuming the bank will lend me it now this law's been passed :rolleyes:

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Is this the key to a more reasonably priced market?

Just now banks have ultimate power over all. If the law were changed to give people more security in their homes, banks would be much more careful about the amounts they lend.

Here in Sweden, if a bank wants to repossess a house, the must prove in court that they performed real due diligence when the loan was issued. Otherwise the person gets to stay & the bank loses. So they are much keener to lend amounts to individuals based on how much they could really pay, not just on hopeful calculations.

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Is this the key to a more reasonably priced market?

Just now banks have ultimate power over all. If the law were changed to give people more security in their homes, banks would be much more careful about the amounts they lend.

Here in Sweden, if a bank wants to repossess a house, the must prove in court that they performed real due diligence when the loan was issued. Otherwise the person gets to stay & the bank loses. So they are much keener to lend amounts to individuals based on how much they could really pay, not just on hopeful calculations.

interesting law - do you have data on average house prices vs average salary in Sweden?

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Is this the key to a more reasonably priced market?

Just now banks have ultimate power over all. If the law were changed to give people more security in their homes, banks would be much more careful about the amounts they lend.

Here in Sweden, if a bank wants to repossess a house, the must prove in court that they performed real due diligence when the loan was issued. Otherwise the person gets to stay & the bank loses. So they are much keener to lend amounts to individuals based on how much they could really pay, not just on hopeful calculations.

So a return to 3.5x times salary then?......followed by a strange crashing sound.... :D

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Is this the key to a more reasonably priced market?

Just now banks have ultimate power over all. If the law were changed to give people more security in their homes, banks would be much more careful about the amounts they lend.

Here in Sweden, if a bank wants to repossess a house, the must prove in court that they performed real due diligence when the loan was issued. Otherwise the person gets to stay & the bank loses. So they are much keener to lend amounts to individuals based on how much they could really pay, not just on hopeful calculations.

Interesting - taking it one step further, and introducing the law of unintended consequences (because we all know that the government don't want to lower house prices).

This way, the government can get the "evil banks" to do the dirty work of lowering house prices by lending less money, whilst the government gets to be the good guy helping out "hard working families".

Everyone's a winner!

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There you go! These damn socialists intervening in the free market. How dare they, yadda yadda yadda.

How old Labour. Questioing cheap credit, and its consequences.

Sorry for plagarising the more right wing thinkers on here but I would say George Mudie is right.

How TruLabour. Im waiting for Crash G. to announce National Debt Insurance. A tax-funded Government scheme to write off the debts of 'victims' of the miracle economy global economic problems

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Is this the key to a more reasonably priced market?

Just now banks have ultimate power over all. If the law were changed to give people more security in their homes, banks would be much more careful about the amounts they lend.

Here in Sweden, if a bank wants to repossess a house, the must prove in court that they performed real due diligence when the loan was issued. .

Exactly the same 30 years ago,banks did exercise diligence and caution.

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interesting law - do you have data on average house prices vs average salary in Sweden?

The economist (based on OECD numbers) thinks that Sweden is about 17% overvalued, versus about 37% for the UK, and almost 50% for Australia.

Curiously they only seem to think the US is only about 19% overvalued (maybe because the boom has been restricted to the coastal/large city markets, while most of the country is ok?)

Economist

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I have to be honest here, the best thing if you have no job, and cannot afford to repay your mortgage is for the bank to repossess.

Having interest rolled up month on month endlessly is just putting off the inevitable.

The day you are issued with a bankruptcy order, your interest charge is halted. You can then start to get some money together for a rented place, as you will no doubt lose the property.

I thought even if you had your house repossesed you still accrue charges until the property is sold. Surely it would be better for them to sell at a loss through an agent then let the bank/building society do it?

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Just now banks have ultimate power over all. If the law were changed to give people more security in their homes, banks would be much more careful about the amounts they lend.

Sure, but tightening credit now would be tantamount to closeing the gate after the horse has bolted.

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thought even if you had your house repossesed you still accrue charges until the property is sold. Surely it would be better for them to sell at a loss through an agent then let the bank/building society do it?

Several points here.

1. The bank or BS have the first charge over the property, therefore you yourself cannot sell at a loss.

2. If you are petioned for Bankruptcy by a creditor, in that instant all interest ceases, if you are smart you would declare yourself bankrupt the minute you fell into negative equity territory. Banks like to keep the interest rolling up to get you really in the brown stuff, so pre-empt their inevitable actions and go voluntary.

3. Banks apply to the courts for an order, for repossesion, you can play this one out for quite a period of time, giving you time to make alternative arrangements and get brownie points plus for any Council Housing of which you would otherwise have to wait a decade to get.

The last thing you want is a millstone that will never ever bear any fruits around your neck. There is a time when its goodbye house, the problem people had during the last recession is accepting it as game over. Friends of mine struggled for years doing multiple jobs, just to hold onto something that had massive negative equity and some even lost it after working so hard for several years.

In my book, Negative Equity, means hop off and let someone else try their luck.

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I thought even if you had your house repossesed you still accrue charges until the property is sold. Surely it would be better for them to sell at a loss through an agent then let the bank/building society do it?

Actually if your house is repossessed then the lender can still pursue you 12 years later for the shortfall and accrued interest. So repossession is no get of jail card.

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Actually if your house is repossessed then the lender can still pursue you 12 years later for the shortfall and accrued interest. So repossession is no get of jail card

Very true, but the days of being ashamed of Bankruptcy are long gone and do not last ten years.

Get in early, declare yourself insolvent and watch them weep.

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Several points here.

1. The bank or BS have the first charge over the property, therefore you yourself cannot sell at a loss.

2. If you are petioned for Bankruptcy by a creditor, in that instant all interest ceases, if you are smart you would declare yourself bankrupt the minute you fell into negative equity territory. Banks like to keep the interest rolling up to get you really in the brown stuff, so pre-empt their inevitable actions and go voluntary.

3. Banks apply to the courts for an order, for repossesion, you can play this one out for quite a period of time, giving you time to make alternative arrangements and get brownie points plus for any Council Housing of which you would otherwise have to wait a decade to get.

The last thing you want is a millstone that will never ever bear any fruits around your neck. There is a time when its goodbye house, the problem people had during the last recession is accepting it as game over. Friends of mine struggled for years doing multiple jobs, just to hold onto something that had massive negative equity and some even lost it after working so hard for several years.

In my book, Negative Equity, means hop off and let someone else try their luck.

Just to point out, a judge will not petion your own bankruptcy if you still own property. And it is very rare for a creditor to bankrupt you unless they know they will not get any payments if they dont.

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Anyone who owes more than they own in assets can declare themselves bankrupt.

For sure if you have any equity in the property then you cannot call yourself insolvent, however this thread is really directed at those who are staring negative equity in the face.

In short, if you have a property worth say, 150k and a mortgage of 175k then declare yourself bankrupt and get out whilst the goings good. To attempt to service a debt that is paying for something less than its original worth is simply a foolish stunt that will end in tears after a lot of hard work and effort.

Banks for sure would like to go to court and arrange a repayment plan, whilst laying on the charges, you will not have a hope in hell of ever climbing out of this hole unless property takes off again soon, or you get a massive payrise, both events unlikely in an economic downturn that will set in for at least 7 years, or even longer.

Edited by laurejon

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Anyone who owes more than they own in assets can declare themselves bankrupt.

For sure if you have any equity in the property then you cannot call yourself insolvent, however this thread is really directed at those who are staring negative equity in the face.

In short, if you have a property worth say, 150k and a mortgage of 175k then declare yourself bankrupt and get out whilst the goings good. To attempt to service a debt that is paying for something less than its original worth is simply a foolish stunt that will end in tears after a lot of hard work and effort.

Banks for sure would like to go to court and arrange a repayment plan, whilst laying on the charges, you will not have a hope in hell of ever climbing out of this hole unless property takes off again soon, or you get a massive payrise, both events unlikely in an economic downturn that will set in for at least 7 years, or even longer.

Laurejon has posted some of the best advice I have read on this site. This thread speaks so much sense and I bet that the banks are trying to get in the position quoted above. Even when the whole market goes POP the majority will cling onto their pride and joy whilst the banks make more money out of peopl who cannot afford it.

LJ's advice is SENSIBLE ADVICE and I advise everyone to way up what his arguement is! I liken this to a game of poker.

If I have put 5K into the pot and someone bets 20K. I could either try and win that 5K back, even though I have a good chance of it costing more, or I could just say "let the 5K go" and wait for a good hand to win it back then.

To expand on what he is saying as well. Call me callous or insensitive here, but when people are in trouble I advise everyone to put their feelings aside and purchase these properties at ROCK BOTTOM PRICES. The owners will not lose out, its only the banks. They are trying to shaft more money out of the public.

Edited by teddyboy

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This bill is shutting the stable door after the horse has bolted in our opinion.

The FSA mortgage regulations make no requirement for lenders to consider whether a customer can afford to repay a loan other than to:

1. To document that they have considered whether _they think_ that a customer can afford the loan.

2. Document their policy that determines what is affordable to a customer.

Obviously it is always in the lenders financial interest for customers to acquire as much debt as they can possibly afford. However this isn't in the economic interest of the nation. This is why we desperately need upper limits on credit availability which take account of the individuals needs, the economy as a whole and the effects on asset prices.

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Is this the key to a more reasonably priced market?

Just now banks have ultimate power over all. If the law were changed to give people more security in their homes, banks would be much more careful about the amounts they lend.

Here in Sweden, if a bank wants to repossess a house, the must prove in court that they performed real due diligence when the loan was issued. Otherwise the person gets to stay & the bank loses. So they are much keener to lend amounts to individuals based on how much they could really pay, not just on hopeful calculations.

I don't often agree with you but I do on this. Reckless lending has been a big factor in HPI and the more sober and equitable practices of the Nordic countries would do a lot to help over here.

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  • 302 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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