Sunday, April 20, 2008

Creative Finance vs Sanctity of Contracts

'Mortgage holidays' for hard-up homeowners

Well, there's an election coming up: "Homeowners facing the threat of repossession could be offered 'mortgage holidays' from their payments and other deals to keep them under their own roof under proposals to be discussed at a government summit this week."

Posted by quiet guy @ 01:09 AM (764 views)
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7 thoughts on “Creative Finance vs Sanctity of Contracts

  • last_days_of_disco says:

    We are heading for massive massive inflation.

    Basically the government is going to try and inflate everyone out of trouble. Will it work? I wonder.

    Payment holidays would give the government time to inflate the currency to reduce the debt and effectively close the gap between the real house price and the actual house price. The big fly in the ointment which they are happily cruising along ignoring which they think they can control, is the unions. People have been bleeding as it is (and serious stuff, like the police and the fire service and etc, etc),

    Massive inflation of the money supply is going to kill the wages of the real economy. The US model is devalue your currency and take back all the jobs that have been outsourced. Time to rebuild our manufacturing sector. Horrible shock in store for all those developing economies. 🙁

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  • Desertorchid says:

    “One option is encouraging more lenders to offer their own shared-ownership schemes to good customers struggling to meet payments, where the bank would effectively buy the house and the former owner would stay on as the bank’s tenant, paying rent.”

    This comment makes me feel physically sick. Is this the future?

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  • Lord D`arcy Pew says:

    1. Extend mortgage, buy a big flash 4X4 and 52″ plasma TV.
    2. Tell bank you can not afford the repayments.
    3. Take a mortgage holiday.
    4. Banks tighten lending.
    5. Government gives £ Billions to banks.
    6. Bank start lending again.
    7. Goto line 1

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  • I’m not sitting on the edge of my seat. Yvette & Co haven’t any cash in the bank to fund these homeowner bailouts, and they know it. All the cash has been spent providing “non-jobs” and in socially engineering British society. What a mess Tony & Gordo have made. Only inflation can be used to get the government out of this hole.

    Just as well they have tied teachers and tube drivers into long term pay deals based on CPI. How long will it take before people realise they have been “had”?

    What happens if some of the banks can’t/don’t want to play ball? Yesterday, I posted an article from Willem Buiter who said we would need £100bn to unstick the mortgage market. More cash please….

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  • A mortgage holiday for the whole of the next Liebour (Labout) period of office?

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  • I’m not sitting on the edge of my seat.

    Ha ha a man of understatement!

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  • it_is_going_with_a_bang says:

    Mortgage holidays is nothing new. Quite a few people i know over the years have had them for one reason or another. But the bottom line is all it achieves for the borrower is more debt and more interest.
    It’s not so much a holiday as another ‘loan’ to add to what you already have. How anyone can justify calling it a holiday is beyond me.

    The actual meaning of the word holiday as far as I know is a ‘free’ day. If the mortgage payments are merely deferred which I’m fairly sure would be the case – i.e added to the debt, then how on earth is that a holiday?

    It like being told you can take a day off in the week provided you do an extra day and a half at the weekend to make up for it. I wouldn’t call that a holiday!

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