Jump to content
House Price Crash Forum
Sign in to follow this  
Realistbear

Independent: " Huge Increase In Forced Defaults On Mortgages"

Recommended Posts

http://money.independent.co.uk/property/mo...oney.com/RENEWS

14 July 2007 22:53 Home > Money > Property > Mortgages
Huge increase in those forced to default on mortgages payments
Buyers are being forced to borrow record amounts of money to finance their property purchases
Number of people defaulting on their payments this year has
doubled to 77,000 each month
Fears are growing of a dramatic increase in the number of houses that are repossessed
By Martin Hickman, Consumer Affairs Correspondent
Published: 11 July 2007
Britain faces a mortgage crisis with payment arrears rising sharply as 18 million homeowners struggle to meet the fifth rise in interest rates in less than a year.
It is being predicted that high earners who have stretched themselves to buy a home will join less prosperous social groups in experiencing problems as they juggle finances to adjust to rises in monthly payments.
Research suggests that twice as many borrowers as last year have missed mortgage payments in the past six months. A website, MoneyExpert.com said that, while 36,000 borrowers a month fell into arrears last year, this year that figure will be 77,000.

Huge numbers. This is worse than many of us thought. And so soon after Great Crash 2 arrived on our shores. Heaven's above, what is it going to be like in a few week's time? :o

Share this post


Link to post
Share on other sites
http://money.independent.co.uk/property/mo...oney.com/RENEWS
14 July 2007 22:53 Home > Money > Property > Mortgages
Huge increase in those forced to default on mortgages payments
Buyers are being forced to borrow record amounts of money to finance their property purchases
Number of people defaulting on their payments this year has
doubled to 77,000 each month
Fears are growing of a dramatic increase in the number of houses that are repossessed
By Martin Hickman, Consumer Affairs Correspondent
Published: 11 July 2007
Britain faces a mortgage crisis with payment arrears rising sharply as 18 million homeowners struggle to meet the fifth rise in interest rates in less than a year.
It is being predicted that high earners who have stretched themselves to buy a home will join less prosperous social groups in experiencing problems as they juggle finances to adjust to rises in monthly payments.
Research suggests that twice as many borrowers as last year have missed mortgage payments in the past six months. A website, MoneyExpert.com said that, while 36,000 borrowers a month fell into arrears last year, this year that figure will be 77,000.

Huge numbers. This is worse than many of us thought. And so soon after Great Crash 2 arrived on our shores. Heaven's above, what is it going to be like in a few week's time? :o

The Independent is becoming known for its bearish spin. Good to know it pointed out that todays repos are a fraction of what they were in the early 1990s - and of course there are far more mortgage holders now so its not apples being compared with apples. I expect the current rise in repos is amongst the sub prime set - which wont affect most housing markets.

Share this post


Link to post
Share on other sites
I expect the current rise in repos is amongst the sub prime set - which wont affect most housing markets.

isn't that exactly what they said in the US a few months ago - THERE IS NO SYSTEMIC RISK! :P

Share this post


Link to post
Share on other sites
Britain faces a mortgage crisis with payment arrears rising sharply as 18 million homeowners struggle to meet the fifth rise in interest rates in less than a year.

Five interest rises is only 1.25%. People have been borrowing on a wing and prayer.

Share this post


Link to post
Share on other sites
The Independent is becoming known for its bearish spin. Good to know it pointed out that todays repos are a fraction of what they were in the early 1990s - and of course there are far more mortgage holders now so its not apples being compared with apples. I expect the current rise in repos is amongst the sub prime set - which wont affect most housing markets.
Number of people defaulting on their payments this year has doubled to 77,000 each month

From tiny acorns (the 77,000) giant oak trees grow. Subprime is very much here I am afraid. All those SI, IO, low intro rates etc. will all end in tears. 2 million of them are due to reset in the coming 18 months and the pain of going from 4% to 8% will make todays tiny rate of 77,000 monthly seem small in comparison.

Share this post


Link to post
Share on other sites
isn't that exactly what they said in the US a few months ago - THERE IS NO SYSTEMIC RISK! :P

This site has hosted several discussions on the distinctions between the size/nature/scope of the UK sub prime market and the (broad) equivakent in the UK.

As for systemic risk, it exists everywhere but its not credible to say the European/UK exposures are as potentially as harmful as the niche US lenders.

Share this post


Link to post
Share on other sites
Huge numbers. This is worse than many of us thought. And so soon after Great Crash 2 arrived on our shores. Heaven's above, what is it going to be like in a few week's time? :o

Huge numbers. Er..... No...

Might be a big increase, but 77,000 is not HUGE NUMBERS.

There's about 24 mill households, 77% are OO = 18,500,000

77,000 in trouble is 0.4%.

A very small percentage of households.

It's not HUGE. But it is significant.

Calm down dear!!! And get a sense of proportion.

Share this post


Link to post
Share on other sites
Guest Charlie The Tramp

Current actions issued are now more or less on par with 1992, the difference this time is, the courts are not so quick in granting eviction orders. However when an order is supended the lender is granted possession but not an eviction order. This gives the defaulter a chance to make repayments and clear any arrears, failing to do so in a satisfactory way, the Lender can then apply for an eviction order.

Share this post


Link to post
Share on other sites
Huge numbers. Er..... No...

Might be a big increase, but 77,000 is not HUGE NUMBERS.

There's about 24 mill households, 77% are OO = 18,500,000

77,000 in trouble is 0.4%.

A very small percentage of households.

It's not HUGE. But it is significant.

Calm down dear!!! And get a sense of proportion.

77,000 monthly may be a tiny number but look at the trend line. Annualised at the current pace of growth and where are we in 6 months time?

Share this post


Link to post
Share on other sites
Huge numbers. Er..... No...

Might be a big increase, but 77,000 is not HUGE NUMBERS.

There's about 24 mill households, 77% are OO = 18,500,000

77,000 in trouble is 0.4%.

A very small percentage of households.

It's not HUGE. But it is significant.

Calm down dear!!! And get a sense of proportion.

While it's likely that some will default continuously, there will be others who just miss the occasionally month. Therefore the total number of households having trouble is likely to be above 77,000.

Share this post


Link to post
Share on other sites
Number of people defaulting on their payments this year has doubled to 77,000 each month

From tiny acorns (the 77,000) giant oak trees grow. Subprime is very much here I am afraid. All those SI, IO, low intro rates etc. will all end in tears. 2 million of them are due to reset in the coming 18 months and the pain of going from 4% to 8% will make todays tiny rate of 77,000 monthly seem small in comparison.

The article is poor. For a start the 77,000 is a prediction. A website, MoneyExpert.com said that, while 36,000 borrowers a month fell into arrears last year, this year that figure will be 77,000.

It also says the current rate is a quarter of the previous high of 75,000 a month. Although treble what they were three years ago, repossessions are a quarter of the rate they were at their peak of 75,000 in 1991

Load of ill written rubbish IMO.

Share this post


Link to post
Share on other sites
77,000 monthly may be a tiny number but look at the trend line. Annualised at the current pace of growth and where are we in 6 months time?

But you said it was huge numbers.

It is a big increase, but it is not huge numbers.

I'll say it again...

Calm down dear.

Don't get so excited. I'm surprised you haven't bursted a blood vessel after all the excitement you manage to pour into your posts.

Why not just chill a little? Why bother to match the excesses of the VI machine with a personal battle/response of equally exuberant bearishness?

Calm down.

Why not employ a bit of cynicism or a sardonic tone in your posts? It would be more endearing, at least.

Share this post


Link to post
Share on other sites
But you said it was huge numbers.

It is a big increase, but it is not huge numbers.

I'll say it again...

Calm down dear.

Don't get so excited. I'm surprised you haven't bursted a blood vessel after all the excitement you manage to pour into your posts.

Why not just chill a little? Why bother to match the excesses of the VI machine with a personal battle/response of equally exuberant bearishness?

Calm down.

Why not employ a bit of cynicism or a sardonic tone in your posts? It would be more endearing, at least.

Or employ some balanced analysis of newpaper reports without selective twisting of predictions.

Share this post


Link to post
Share on other sites
The article is poor. For a start the 77,000 is a prediction. A website, MoneyExpert.com said that, while 36,000 borrowers a month fell into arrears last year, this year that figure will be 77,000.

It also says the current rate is a quarter of the previous high of 75,000 a month. Although treble what they were three years ago, repossessions are a quarter of the rate they were at their peak of 75,000 in 1991

Load of ill written rubbish IMO.

Arn't we close to what they had in early 1989, by 1991 the sh*t had hit the fan, property had already dropped 50% by this time and the slowdown in houseprices had created the recession of all recessions.

I am surprised we are having so many repos so early with historic low interest rates, high employment I believe it is not going with the script. In 1989 we may have seen about 2K knocked off an asking prices we are already seeing 100K drops in asking prices in Coventry in nicer araes of the town, what is happening. ???? I am mythed.

There will be no crash "READ MY LIPS"

Edited by joey

Share this post


Link to post
Share on other sites
Arn't we close to what they had in early 1989, by 1991 the sh*t had hit the fan, property had already dropped 50% by this time and the slowdown in houseprices had created the recession of all recessions.

You please tell us.

Any stats? Any views?

Share this post


Link to post
Share on other sites
While it's likely that some will default continuously, there will be others who just miss the occasionally month. Therefore the total number of households having trouble is likely to be above 77,000.

Exactly. In fact 460,000 have missed payments over the past six months. Which is already more than 2006's total figures.

http://firstrung.co.uk/articles.asp?pageid...&cat=44-0-0

The thread discussing this earlier in the week:

http://www.housepricecrash.co.uk/forum/ind...showtopic=50891

Share this post


Link to post
Share on other sites
The Independent is becoming known for its bearish spin. Good to know it pointed out that todays repos are a fraction of what they were in the early 1990s - and of course there are far more mortgage holders now so its not apples being compared with apples. I expect the current rise in repos is amongst the sub prime set - which wont affect most housing markets.

..in the US 48% of defaulters are Prime.....but there are hopefully more of them...!.. :o:o

Share this post


Link to post
Share on other sites
..in the US 48% of defaulters are Prime.....but there are hopefully more of them...!.. :o:o

Is tonight the night of the Bold Assertion? Got any evidence for this? No matter how remote?

Share this post


Link to post
Share on other sites
This site has hosted several discussions on the distinctions between the size/nature/scope of the UK sub prime market and the (broad) equivakent in the UK.

As for systemic risk, it exists everywhere but its not credible to say the European/UK exposures are as potentially as harmful as the niche US lenders.

pedantry aside, i know it's hard to compare the markets directly, but i think we can agree the UK has seen spectacular HPI the last few years and that can't be explained by wage inflation, so the only explanation is that lenders are lending higher multiples and/or salaries are being exaagerated and left unchecked, otherwise we wouldn't see such continued strength in mortgage approvals........

now you can argue the toss about what is and is not subprime, in my mind it's reckless lending without a care how the borrower is going to pay back the whole capital over the term of the mortgage, the banks/lenders don't care for the most part because they can package it up and sell the risk on......tell me, if you sell to someone who has good credit but is stretching themselves on a 95% LTV 30 year IO mortgage fixed at 5.5% for two years then reverting to the lender's SVR, is that not subprime? because surely it's not affordable in the longer term and relies on future capital gains......

that may seem like an extreme case but i know it's happening a lot (well in London anyways) because I've spoken to dozens of property investors (large and small) at various events and seminars, people are so convinced of future capital equity gains that the possibilty of NE and the risk doesn't even register, besides it's the only way they can get on the property ladder (I'll admit I very nearly bought the above product on a self-cert from GMAC at ~6x "stated" income, the only reason I didn't qualify was the property was ex-LA, was nothing to do with my less-than-stellar credit rating)......this is why I laugh when people think London is immune from a crash, we're more over-stretched than the rest of the country......

anyway I digress, my point is I think sub-prime is pretty rife here and you could argue that credit will tighten up more quickly here than we are seeing in the US, as banks and private investors aren't stupid and will take what's happening there as advanced warning, if demand for debt disappears here property prices will fall off a cliff more abruptly than in the US, regardless of people's appetite for ridiculous mortgage loans. i can't really comment on the rest of europe except to say i think spain and ireland are equally fvcked.

Edited by Senor Miguel

Share this post


Link to post
Share on other sites
Is tonight the night of the Bold Assertion? Got any evidence for this? No matter how remote?

..... I quoted this on another thread recently...it is actually 58% and 42% sub prime and prime, respectively:

www.bloomberg.com/apps/news?pid=20601087&sid=adIQXu4IeMsA&refer=home

An estimated 58 percent of properties in the foreclosure process are linked to borrowers with subprime loans, and RealtyTrac expects U.S. foreclosures to reach 1.8 million by year's end, Rick Sharga, a spokesman for the company, said in an interview.

There are probably various shades of prime.. :o:o

Share this post


Link to post
Share on other sites

RB does some good posts, people take the Mick cos he calls the bust so often on blips in trends.

The crash is coming, I 4 one am convinced it will be a terrible time, we will all suffer and seeing smug BTL amateurs suffer will not compensate for our own pain, timing is impossible to predict but I think we all feel its not going to be long now, this bubble is bigger than any before and extends into more than just property and to many countries so the crash should be very big.

Big I suspect will mean years and years of grinding down, then peak oil will kick in keeping the downward trend going.

GC2 possibly, a depression worse than 1929 probably thats my view, still if we avoid WW our kids should be OK, anyway we are all so rich now an extra 75% loss of wealth will not cause hunger, just free flowing traffic on the motorways.

Share this post


Link to post
Share on other sites

http://news.independent.co.uk/business/com...icle2770937.ece

Business View: We must overcome our addiction to debt

By Andrew Murray-Watson, Business Editor
Published: 15 July 2007
The Ernst & Young profits warning report makes grim reading. Corporate earnings have been keeping the market bears at bay for a long time, but it looks like they are now coming under pressure as
consumer credit dries up and businesses look to borrow less.
Some smart hedge funds are already diverting assets from the UK to the US. Despite the problems across the Atlantic with sub-prime mortgages, the weakness of the dollar makes assets like property and infrastructure companies increasingly attractive. Once the mortgage problems are shaken out of the system, confidence in the US market will grow strongly - or that's the theory.
But in the UK, any bursting of the credit bubble will hurt the economy a great deal. Brits are hooked on debt in the form of mortgages and credit cards - and we are unlikely to rein in our spending in time to avoid an economic downturn. Of
250,000 county court judgments against consumers in the first quarter of this year,70 per cent were for credit-related matters.
Only capital gains on property and shares have driven the belief on the part of the consumer that increased levels of debt simply don't matter. That opinion has to change fast.

The inability to repay debt spells the end of the miracle times. The small numbers we are seeing in trouble today will seem even smaller in the months ahead when 250,000 in the first Q becomes as many in a single month.

Share this post


Link to post
Share on other sites
Guest Yeahbutnocrash
http://money.independent.co.uk/property/mo...oney.com/RENEWS
14 July 2007 22:53 Home > Money > Property > Mortgages
Huge increase in those forced to default on mortgages payments
Buyers are being forced to borrow record amounts of money to finance their property purchases
Number of people defaulting on their payments this year has
doubled to 77,000 each month
Fears are growing of a dramatic increase in the number of houses that are repossessed
By Martin Hickman, Consumer Affairs Correspondent
Published: 11 July 2007
Britain faces a mortgage crisis with payment arrears rising sharply as 18 million homeowners struggle to meet the fifth rise in interest rates in less than a year.
It is being predicted that high earners who have stretched themselves to buy a home will join less prosperous social groups in experiencing problems as they juggle finances to adjust to rises in monthly payments.
Research suggests that twice as many borrowers as last year have missed mortgage payments in the past six months. A website, MoneyExpert.com said that, while 36,000 borrowers a month fell into arrears last year, this year that figure will be 77,000.

Huge numbers. This is worse than many of us thought. And so soon after Great Crash 2 arrived on our shores. Heaven's above, what is it going to be like in a few week's time? :o

Well lets not get too excited because of hoping to be proven right by claiming 'CG2 is here!'

I'm not saying there cant be a crash but that we need to be a little more cautious / realistic before claiming that

IMO you can really only fully claim a crash well into it or after it has happened

It seems a bit more credible to say something like 'there's an increasing danger or possibility of a crash' than actually trying to claim a crash has 'arrived'

I'd suggest that if there is no crash in the next 2 years the 'imminent crash' theorists will have been proven wrong again and will need to reappraise the facts

Share this post


Link to post
Share on other sites
http://money.independent.co.uk/property/mo...oney.com/RENEWS
14 July 2007 22:53 Home > Money > Property > Mortgages
Huge increase in those forced to default on mortgages payments
Buyers are being forced to borrow record amounts of money to finance their property purchases
Number of people defaulting on their payments this year has
doubled to 77,000 each month
Fears are growing of a dramatic increase in the number of houses that are repossessed
By Martin Hickman, Consumer Affairs Correspondent
Published: 11 July 2007
Britain faces a mortgage crisis with payment arrears rising sharply as 18 million homeowners struggle to meet the fifth rise in interest rates in less than a year.
It is being predicted that high earners who have stretched themselves to buy a home will join less prosperous social groups in experiencing problems as they juggle finances to adjust to rises in monthly payments.
Research suggests that twice as many borrowers as last year have missed mortgage payments in the past six months. A website, MoneyExpert.com said that, while 36,000 borrowers a month fell into arrears last year, this year that figure will be 77,000.

Huge numbers. This is worse than many of us thought. And so soon after Great Crash 2 arrived on our shores. Heaven's above, what is it going to be like in a few week's time? :o

77,000 a month:

There are about 2.6 per household and less then 60,000,000 people

Say about 23,000,000 households.

Say about hald still hold mortgages:

12,000,000,000

Now 72,000 a month is:

which is: 864000 a year of about 12,000,000 that is massive.

Still there you go...

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...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 349 The Prime Minister stated that there were three Brexit options available to the UK:

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal



×
×
  • 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.