Sunday, January 6, 2008

Finding Your Way Through a World of Pain

Banks move to head off repossessions

Banks are set to contact thousands of at-risk borrowers under plans to stave off fears of a huge rise in the number of home repossessions.

Posted by quiet guy @ 01:07 AM (816 views)
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9 thoughts on “Finding Your Way Through a World of Pain

  • And what, pray tell, will the poor souls do when the banks contact them? They are probably already aware of the trouble they are in. Unless the bank is willing to waive repayments (LOL!), I doubt this will make a measurable difference.

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  • That’s very thoughtful and awfully kind of them.

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  • This is encouraging.

    “Ms Knight said that the code would also demand that banks offer concessions to borrowers who contacted their bank first.”

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  • Yeah – they will be put first in the repossession queue!

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  • stillthinking says:

    In the last crash, banks were very eager to foreclose in the early stages, as the negative equity would be manageable. As the prices declined they then were much more likely to help the occupiers because selling would create so much negative equity that impossible for the occupier to pay back. I read this on this site, and saw a graph showing a peak and then a slowdown of repossessions when prices were at the bottom. Probably the banks realised they could just wait for prices to inflate again.
    So, given this, why would they follow this government advice ?
    Did we miss the first bit on the repossession curve? I am guessing the situation is perhaps worse than has been reported. On another note, considering the government are concerned about ‘talking ourselves into a recession’, I wonder what the effect of a bulk warning letter shot to the a huge chunk of the mortgage owning public will have. All the letter can possibly say is, ‘With your own interests at heart, please stop consumer spending and look after your mortgage payments, or we will take your house. Sincerely yours, …’.

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  • I wonder what the concessions are?

    Perhaps the banks will be considerate enough to wait a few months for the clients to sell their 3 beds at vastly reduced prices and then offer them reasonable rates when they buy a run-down 1 bed flat.

    By the way, I don’t remember seeing many of those adverts recently. The ones guaranteeing to buy your home off you.

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  • I just think the banks want to know now, so they can force sales before the HPC hits and the houses will be worth sod all.

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  • hpwatcher, I agree.

    I cannot see the banks sending customers a letter suggesting that if they get into trouble they can a) take a mortgage payment holiday or b) borrow more to cover the shortfall or c) anything remotely constructive to stop them defaulting..

    …it would be suicide on the part of the banks. “can’t be bothered repaying? Then don’t!!”

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  • I think you’re right hpwatcher, but I also think if people cannot afford their mortgages they would also be better to sell sooner rather than later, especially if prices are going downhill.

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