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Converted Lurker

Anyone Hear Moneybox Interviewing A Bod From Fscs?

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you potentially have big problems. If you have a 100K mortgage and 35K savings with same bank you get no protection as you're technically 65k in debt to them. :blink: They'll also net off any loans or credit card debt before a calc on compensation is made. Humble apologies if I got this wrong, but I don't think I did :o

Edited by Converted Lurker

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you potentially have big problems. If you have a 100K mortgage and 35K savings with same bank you get no protection as you're technically 65k in debt to them. :blink: They'll also net off any loans or credit card debt before a calc on compensation is made. Humble apologies if I got this wrong, but I don't think I did :o

So you get your loan reduced to 65K when the bank goes under - whats the problem?

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You heard it right. I read the same thing on the BBC website on Thursday but I can’t find the link now.

thanks for that, yep it was the 'drop the bacon butty moment' of the week for me. Casually dismissed at the time of the NR fiasco <_< I'll bet the vast majority of Brits still have all their business in one bank. :unsure:

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you potentially have big problems. If you have a 100K mortgage and 35K savings with same bank you get no protection as you're technically 65k in debt to them. :blink: They'll also net off any loans or credit card debt before a calc on compensation is made. Humble apologies if I got this wrong, but I don't think I did :o

you would be 65k in debt to them. (with a property as colateral)

no "technically" about it.

what sort of protection were they talking about?

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Sounds fair enough, but if banks are making sounds about it expect serious trouble ahead (as if we didn`t already). Smart sheeple will start separating their accounts, smarter ones will stockpile cash in their home, if for no other reason than to stoke the fire next winter.

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:blink: er no :lol:

Er yes? I had an offset mortgage from 2001-2005 and basically every month I got a statement with a bloody big negative value on it. There was no separate 'savings' or 'loan' amount, just a total amount owed and one single account number. As we paid it off, the total amount owed (and thus monthly interest payments) decreased.

Surely if I originally borrowed £100K, paid that down to £70K and then the bank goes tits ooop, at that point any receiver just inherits my 70K of debt as an 'asset'?

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you would be 65k in debt to them. (with a property as colateral)

no "technically" about it.

what sort of protection were they talking about?

very much a discussion relating to this 'magic 35K' compensation, the guy was exlaining re RBS/Nat west would be counted as one and not 2 separate organisations. Moved on to questions re compo if you held everything in one bank, bottom line (as I listened) if you expect savings to be guaranteed and you're in debt to the bank (over and above your savings) you'll get nowt. Got 35K on deposit, but you owe 35K on a mortgage then tough <_<

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So you get your loan reduced to 65K when the bank goes under - whats the problem?

They wouldn`t reduce your loan, you have just lost your savings? The bank then calculates your "compensation" by taking into account how much you owe them, so you get f*ck all? Loss of savings is caused by Global flatulence which is a matter of opinion, wheras a debt to a bank( or anyone taking over a bank) is real?

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very much a discussion relating to this 'magic 35K' compensation, the guy was exlaining re RBS/Nat west would be counted as one and not 2 separate organisations. Moved on to questions re compo if you held everything in one bank, bottom line (as I listened) if you expect savings to be guaranteed and you're in debt to the bank (over and above your savings) you'll get nowt. Got 35K on deposit, but you owe 35K on a mortgage then tough <_<

Thanks

I feel sure that they would have to offset the deposit against the loan, if they were insolvent.

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how was this surprising?

it was to me and I thought I was 'clued up'. Can't recall Darling saying to NR savers "not a problem all your savings are protected, however, the FCSC would make a calc based on your total indebtedness to the bank, taking full account of your gross mortgage debt, your gross loan debt and we'd amortise this including your credit card debt and then send you a bill" ;) Brilliant :blink:

Edited by Converted Lurker

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Thanks

I feel sure that they would have to offset the deposit against the loan, if they were insolvent.

That was my initial feeling. Oh I don't know what to believe now. Where can we get clarification?

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you potentially have big problems. If you have a 100K mortgage and 35K savings with same bank you get no protection as you're technically 65k in debt to them. :blink: They'll also net off any loans or credit card debt before a calc on compensation is made. Humble apologies if I got this wrong, but I don't think I did :o

That's correct.

However, that stands for any bank within the same banking group...so if you have a 100k mortgage with Woolwich and 35k in a Barclays savings account, they can still just deduct your 35k savings with Barclays off the balance of your mortgage with Woolwich.

In order to protect your savings, it would need to be deposited in a Banking group where you have no debt.

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you potentially have big problems. If you have a 100K mortgage and 35K savings with same bank you get no protection as you're technically 65k in debt to them. :blink: They'll also net off any loans or credit card debt before a calc on compensation is made. Humble apologies if I got this wrong, but I don't think I did :o

What are the rules if the committments are transferred to another bank.

What I mean is, if the 35k is protected 100% guaranteed what actually happens to the 100k, I'd assume that a creditor would buy it for a discount figure. However because it no longer covers the purchase price mightn't the depositor be expected to make up the shortfall, or in the worst case the purchasing creditor could call the full amount of the mortgage in. Sort of your deposit is protected, but the advance you borrowed through mortgage isn't?

example

Bank A has my deposits of 35k and my 100k mortgage,

Bank A goes bust, I get my 35k as protection - but this could be a long drawn out process to get the cash in an illiquid market

Bank B buys mortgage book off Bank A for 60p in the pound

Bank B now hits me for the 40k difference immediately, otherwise will foreclose the mortgage (is this a margin call?), but because I can't get the 35k quickly it does foreclose.

I can't pay it, so Bank B now has my 100k property for 60k, dumps it onto the market for 70k, 10% profit for them, 30% price fall.

Sorry if this is wooly headed, it is Easter Monday.

Edited by shippers

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Tempting people to put all their business under one roof was probably a safety net many banks introduced when they started playing about with funny money,just in case. Whatever other safety nets they have will soon become apparent. One thing is sure, the dozy sheeple will be dragged into the banks mess if they don`t sharpen up pretty soon. Get it all out and sown into your mattress, make the banks beg you for a loan.

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i have a mortgage with the coventry for 140k, i have an offset of 33k, if they go under i my 33k is wiped out and i get a new mortgage for 107k.

My only concern is the 33k is not mine but a little stooze pot I have with a few credit cards. Time to pay back the cards?

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That's correct.

However, that stands for any bank within the same banking group...so if you have a 100k mortgage with Woolwich and 35k in a Barclays savings account, they can still just deduct your 35k savings with Barclays off the balance of your mortgage with Woolwich.

In order to protect your savings, it would need to be deposited in a Banking group where you have no debt.

Crucial information? Should be pinned and more widely reported?

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That's correct.

However, that stands for any bank within the same banking group...so if you have a 100k mortgage with Woolwich and 35k in a Barclays savings account, they can still just deduct your 35k savings with Barclays off the balance of your mortgage with Woolwich.

In order to protect your savings, it would need to be deposited in a Banking group where you have no debt.

D'ya reckon I'm right in suggesting that the vast majority of savers are ignorant of this fact? Hardly common knowledge is it and I can't recall it being a discussion point when the NR panic ensued? <_< As savers/investors/debtors us Brits are institutionally lazy, all eggs in one basket etc...

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i have a mortgage with the coventry for 140k, i have an offset of 33k, if they go under i my 33k is wiped out and i get a new mortgage for 107k.

My only concern is the 33k is not mine but a little stooze pot I have with a few credit cards. Time to pay back the cards?

At double the interest rate of the existing mortgage?

It is not the time to pay anything back, it is time to starve the beast. If you are just holding the cards as a cash cushion the bank may or may not ask you ( tell you) to give them up? If you owe 33k on the cards it`s too late, just make minimum payments until there is some sense of clarity about what is going on. The horsemen are coming over the hill!

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As I understand it,

e.g. 1. If you have a 100k mortgage with Woolwich and 80k in a Barclays savings account, they will deduct your 80k savings with Barclays off the balance of your mortgage with Woolwich. You now owe 20K to Woolwich

e.g. 2. If you have a 20k mortgage with Woolwich and 80k in a Barclays savings account, they will deduct 20k of your savings with Barclays off the balance of your mortgage with Woolwich. You now owe 0K to Woolwich and get 35K compensation, you have lost 25K

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  • 295 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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