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Realistbear

4,000,000 Home "owners" Taking Out Loans To Pay Mortgage

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Apologies if already posted but thought it worth a reprise from a few days ago as it is the most dire piece yet from the press:

http://business.timesonline.co.uk/tol/busi...icle4261369.ece

From Times OnlineJuly 3, 2008
Homeowners turn to loans to pay mortgages
Lauren Thompson
Increasing numbers of hard-pressed homeowners and tenants are turning to personal loans and credit cards to fund their housing costs.
More than
4 million households
have taken out a personal loan or credit card to cover their mortgage or rental costs in the past year, according to a survey by comparison service Moneysupermarket.com.

Individuals behaving like Gordon's NuLabour overseers. Compounding the debt bubble with each loan that is acquired. We had better start hiring more bankruptcy judges.

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Although I've only just registered I've lurked around this site on & off for ages. This news is by miles the thing that's unsettled me most.

Simply because it indicates how deeply the "borrow to fund borrowing" idea is implanted in some folks' heads.

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I blame Robert Maxwell! He showed us that someone who was actually probably the country's poorest individual lived as one of its richest.

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Although I've only just registered I've lurked around this site on & off for ages. This news is by miles the thing that's unsettled me most.

Simply because it indicates how deeply the "borrow to fund borrowing" idea is implanted in some folks' heads.

Agreed - this is completely nuts. There's a complete failure to understand compound interest built in here, which provides insight into quite how this got so bad.

Either that, or we give them too little credit (pun intended). It could be that they're buying time to plot what to do next when they either become overwhelmed by the interest on the loan designed to pay the interest on the morgage (likely), or somehow win the lottery or get a pay rise or something similar (less likely).

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Well that's 4 million who are heading for forced sales then, no rise in unemployment required.

It's a big figure, a significent one.

If they can't service a debt at 7%, how on earth are they going to service increasing portions of that debt at 18% plus on the credit card ?

These are the people who are going to be setting the market price as they sell up in forced desperation.

There are enough of them to be doing so over the course of the next couple of years, dragging down the market price of all those who (at the moment) "don't have to sell".

Nice one.

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Woe, that is incredible, staggering but I am sitting down... If you are conservative and say 1.5 people are in each household that is 6 million people doing this. How you get 1.5 people living in a hosue is beyond me... um, OK, let's say 8 million people doing that at 2 per household.

There must be a lot of desperate people out there.

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Apologies if already posted but thought it worth a reprise from a few days ago as it is the most dire piece yet from the press:

http://business.timesonline.co.uk/tol/busi...icle4261369.ece

From Times OnlineJuly 3, 2008
Homeowners turn to loans to pay mortgages
Lauren Thompson
Increasing numbers of hard-pressed homeowners and tenants are turning to personal loans and credit cards to fund their housing costs.
More than
4 million households
have taken out a personal loan or credit card to cover their mortgage or rental costs in the past year, according to a survey by comparison service Moneysupermarket.com.

Individuals behaving like Gordon's NuLabour overseers. Compounding the debt bubble with each loan that is acquired. We had better start hiring more bankruptcy judges.

This supply of money is slowly being turned off. They are only holding off the inevitable if they are turning to these methods of sustaining a lifestyle they cannot afford.

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Clearly false economy, and definitely buying time. Without an increase in income, or decrease in expenditure, the inevitable will happen. What do they do next time around - go even deeper into debt? It can all only breed sadness.

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Don't worry if 4 million people think theres a greater fool to unload their house onto - paying off all debts [with profit too], surely they cant all be wrong?

:lol:

Edited by notanewmember

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Having worked as a debt collector I can tell you that people NEVER react quickly enough to changes in their circumstances. All they do is retreat into a shell and keep deferring things to avoid facing reality.

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Having worked as a debt collector I can tell you that people NEVER react quickly enough to changes in their circumstances. All they do is retreat into a shell and keep deferring things to avoid facing reality.

No m,ate, those people you met while working as a debt collector did that, which is why you met them.

Other people don't do that and that's why you never met them. Your statement is a bit like a policeman telling us that nearly everyone he meets is a criminal, or a doctor that everyone on earth must be a bit poorly.

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I think he was simply making a good point about the mindset of people with debt problems Injin, the details of the phrasing aren't as important!

And lets face it, at least 4 million people in this country (and probably a lot more) have the mentality of the people that dinker met in his debt collecting days, so generalising is fair game in this case.

Edited by DementedTuna

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Perhaps Injin could start a consultancy advising people how to not repay their mortgage debt by asking the bank for proof that they lent them money. He could make a fortune and save millions from homelessness.

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The consumer debt figure has been just rising and rising, utterly incredible really. The 4mil is surprising, but considering the economic policies that have led to this situation not so very surprising at all.

Where will it end £1.5T/£1.6T +++ and 5 mil+ reliant on recirculating (and growing) credit before someone calls stop?

The situation certainly isn't getting any better.

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Perhaps Injin could start a consultancy advising people how to not repay their mortgage debt by asking the bank for proof that they lent them money. He could make a fortune and save millions from homelessness.

I'd get a bullet in the back of my head or landed in jail on made up charges. There is no chance whatsoever of doing it on a commercial basis.

However, I can confirm that I used that approach and it worked. If people want to do it they have to do their own research and take it on their own heads.

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Charles Dickens said, 'its not the strongest of the species that survive, nor the most intellegent, its those most responsive to change'.

It's a brilliant maxim for life in general. Keep on your toes, try to see the truth of the situation around you, not what you think you see and act sharply.

Not many of us up to it however!

That's why most get into BTL too late and many are sticking to their asking prices today. They'll have the same fate as the dinosaur!

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Brown will be upset as people are unable to borrow just to survive and as people sit back and look at what wrong and whats wrong can be sumed up with one simple word

TAX

Stuff borrowing just to feed the tax man when half the money ends up in MP's pockets and i don't agree how they are spending the other half.

Time to get ilegal inmigrants out and chavs back to work i thinks.

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This is complete RUBBISH!

sorry to spoil your fun everyone. i'm as bearish as everyone (sold to rent) but there's no way that 1/3 of mortgage borrowers are using credit cards to pay off their loans

it is in response to a survey on moneyxxx.com

it's not a random sample

it's like saying 95% of the population are ill as 95% of people on NHS direct showed symptoms of illness

1/3 of people who are struggling with money so looking for money saving ideas and have time to fill in some random survey (unemployed?!) have used a credit card to pay off their mortgage

this is not a representative sample of the population

doesn't mean things aren't bad, but i'd eat my hat if they're this bad :):):)

p.s. i put a similar reply to the times article but for some reason they didn't print it.. wimps!

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This is complete RUBBISH!

sorry to spoil your fun everyone. i'm as bearish as everyone (sold to rent) but there's no way that 1/3 of mortgage borrowers are using credit cards to pay off their loans

it is in response to a survey on moneyxxx.com

it's not a random sample

it's like saying 95% of the population are ill as 95% of people on NHS direct showed symptoms of illness

1/3 of people who are struggling with money so looking for money saving ideas and have time to fill in some random survey (unemployed?!) have used a credit card to pay off their mortgage

this is not a representative sample of the population

doesn't mean things aren't bad, but i'd eat my hat if they're this bad :):):)

p.s. i put a similar reply to the times article but for some reason they didn't print it.. wimps!

I agree, but I think that remark about your hat is, er, unfortunate. :unsure:

Edited by 1929crash

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Charles Dickens said, 'its not the strongest of the species that survive, nor the most intellegent, its those most responsive to change'.

Actually that is Peter Kropotkin from "Mutual Aid: A Factor of Evolution"

Heres the full quotation:

"Those who survive a famine, or a severe epidemic of cholera, or small-pox, or diphtheria, such as we see them in uncivilized countries, are neither the strongest, nor the healthiest, nor the most intelligent. No progress could be based on those survivals -- the less so as all survivors usually come out of the ordeal with an impaired health, like the Transbaikalian horses just mentioned, or the Arctic crews, or the garrison of a fortress which has been compelled to live for a few months on half rations, and comes out of its experience with a broken health, and subsequently shows a quite abnormal mortality. All that natural selection can do in times of calamities is to spare the individuals endowed with the greatest endurance for privations of all kinds. So it does among the Siberian horses and cattle. They are enduring; they can feed upon the Polar birch in case of need; they resist cold and hunger. But no Siberian horse is capable of carrying half the weight which a European horse carries with ease; no Siberian cow gives half the amount of milk given by a Jersey cow, and no natives of uncivilized countries can bear a comparison with Europeans. They may better endure hunger and cold, but their physical force is very far below that of a well-fed European, and their intellectual progress is despairingly slow."

http://www.calresco.org/texts/mutaid2.htm

It rather reminds me of the genius of Richard Granger, one of Labours favoured senior managers:

"Managing the NHS IT suppliers is like running a team of huskies. When one of the dogs goes lame , it is shot. It is then chopped up and fed to the other dogs. The survivors work harder, not only because they have had a meal, but also because they have seen what will happen should they themselves go lame."

http://www.computing.co.uk/computing/news/...me-hummer-drive

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This is complete RUBBISH!

sorry to spoil your fun everyone. i'm as bearish as everyone (sold to rent) but there's no way that 1/3 of mortgage borrowers are using credit cards to pay off their loans

it is in response to a survey on moneyxxx.com

it's not a random sample

it's like saying 95% of the population are ill as 95% of people on NHS direct showed symptoms of illness

1/3 of people who are struggling with money so looking for money saving ideas and have time to fill in some random survey (unemployed?!) have used a credit card to pay off their mortgage

this is not a representative sample of the population

doesn't mean things aren't bad, but i'd eat my hat if they're this bad :):):)

p.s. i put a similar reply to the times article but for some reason they didn't print it.. wimps!

We're entering propaganda wars now. Seems bear news is overwhelming, and probably skewed to the extreme in some cases.

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Perhaps this explains the complete denial in asknig prices - millions of households simply cannot afford to drop their asking prices because they have so much debt?

I agree there are a lot of people who cannot afford to drop thier prices, But there are also millions who are from the old school who have a lot of equity in thier property and can drop thier price to get shut and when money is tight like it is now they will drop thier price and still come out with a profit in a lot of cases 20 times what they paid for the property.

DO YOU THINK THESE PEOPLE WILL WORRY ABOUT DROPPING THIER PRICE TO GET SHUT IN A FALLING MARKET ?

Edited by TIMSY

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  • 401 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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