Sunday, October 24, 2010

Another article about repossessions

One Mess That Can’t Be Papered Over

Is the banks’ sloppy paperwork a matter of simple technicalities that are relatively easy to cure, as the banks contend? Or are there more far-reaching consequences for banks and the institutions that bought mortgage-backed securities during the mania?

Posted by devo @ 10:06 PM (1899 views)
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14 thoughts on “Another article about repossessions

  • As these articles become more and more mainstream, notice how the original subprime borrowers are becoming bit players in a bigger drama.

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  • A bit of context (with thanks to khards)

    Of the 2.1 million mortgages in foreclosure as of Sept. 30, the average loan is 484 days—or about 16 months—past due, according to LPS Applied Analytics. That is up 93% from 251 days in January 2008.

    In New York, the average borrower in foreclosure hasn’t made a payment in roughly 20 months.

    Does anyone have comparative data for the UK?

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  • I’m thinking a lot of of people here in the UK aren’t paying their mortgages and are finding they’re getting away with it.

    This would go some way to explaining how house prices have remained so resilient since the credit crunch.

    Anyone able to prove me right or wrong?

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  • Devo

    If they’re on interest only and 0.5% below base reset then they aren’t paying a mortgage legally.
    How they’re getting set with it IS another matter.

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  • fallingbuzzard says:

    The Council for Mortgage Lenders data does support your view. Average repo in the UK at the point of repossession is also 20 months behind.

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  • @str 2007

    I asked for data relating to missed mortgage payments.

    It seems to me that linking it with below base resets is clouding the issue. Why would you want to do that?

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  • Thanks fallingbuzzard – a link would be more than useful.

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  • If you’re going to post articles to protected content, post the content else don;t bother

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  • @7 devo

    There’s some useful data in a report commissioned by CLG entitled ‘Modelling and forecasting UK mortgage arrears and possessions’.

    http://www.communities.gov.uk/documents/housing/pdf/1643676.pdf

    This draws on CML data, amongst others, which is otherwise only available to members.

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  • Devo

    Not intentionally clouding the issue, just pointing out that alot of mortgages at present have been dramatically reduced in their monthly cost.

    I don’t know how our repayment levels compare to those on the States (which started with teaser rates), but just surprised so many would be in default arrears given the current low monthly repayments.

    Were you implying that the length of time being taken to activate a repossession order meant all the paperwork had been lost ?

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  • Perceived wisdom was that if three monthly mortgage payments were missed, repossession procedures were instigated then you were out after a year. Now all of a sudden, 20 month periods of grace are being bandied about – but those who know don’t want to talk about it.

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  • The last govt ordered the mortgage lenders to not repo’ until they had explored every alternative route. All this achieved was to delay the inevitable, and I have a nasty feeling the coalition has signed up to much the same strategy – after all, when someone gets repo’d, they very often have to look to the state to find them emergency shelter at the taxpayer’s expense.

    However, if a family’s finances are in total meltdown, there’s not a lot that can be done, and you can’t expect the mortgage lenders to tolerate a non-performing loan indefinitely..

    As for the US, well they have got (gotten?) themselves a splendid mess – but as the little guy nevers wins in America, it won’t stop the foreclosures..

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  • As Uncle Tom says, the can was kicked down the road.

    I don’t know though how the US figures compare to ours. Certainly, to date, their house prices appear to have fallen much further.

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  • repos in this country are very low (and still falling) because interest rates are at record lows and unemployment is not too bad (especially amongst homeowners). We do not have even a hint of the same ‘paperwork’ problems as the States. If unemployment and interest rates tick up then we will have more repos. It’s not rocket science.

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