Wednesday, October 27, 2010

Fun With Mortgage Equity Withdrawal

How leaving finances to her husband left Laura £1m in debt and cost her home and her marriage

Basically, they bought their house for £48,000 decades ago, it had risen to £1.25 million at the peak and the husband had MEWed every penny to fund what appears to be a very lavish lifestyle, holidays, private school, two cars, parties etc etc. And now she's complaining..?

Posted by mark wadsworth @ 01:31 PM (2332 views)
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21 thoughts on “Fun With Mortgage Equity Withdrawal

  • sibley's b'stard child says:

    Trying…to…muster…up….sympathy.

    Fail.

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  • wonder if nickb will complain about this article too, after all he stated he can go and buy the dailymail without us posting its articles on here

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  • This is quite widespread actually, I’m hearing about this sort of thing all the time.

    Like the other day, I heard about someone in their 70’s with a house worth 250k and 300k of debts…..god knows what the money went on.

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  • wonder if nickb will complain about this article too,

    I wish nickb would b off.

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  • i have heard a few people who did this , bought a place abroad for cash and let their UK house get repossessed thus gaining a free house abroad and walking away from their UK debts

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  • She needed to tell this ‘innocent victim’ story in order to get the court settlement of £400,000.

    She’s innocent, he was misled by his employer – no personal responsibility to see here, move along now.

    What a good idea – tell your bank manager “I have a problem, I can’t maintain my lifestyle” and he’ll bend over backwards to see you get the funds.

    Jeez

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  • All the baby boomers have be at it. Now they want the younger generation to pay for their over-valued houses. Greedy fu ckers.

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  • You have to wonder who the idiots are though… is it them for living a life of luxury, living beyond their means but having a great time, not really caring that the debt will have to be repaid (or more likely, written off at taxpayers expense through a bank bailout), or us, spending only what we have and moaning because houses are too expensive and we pay too much tax.

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  • Game over. I was waiting for the Mail to start printing this kind of thing again.

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  • timmy t – yes, the better-off have been round the block a few times, spoken to lawyers and accountants and know how to game the system. In the US ‘jingle mail’ is most common with $1 million+ houses for this reason. The less well-off are more likely to worry about courts and bailiffs if they fail to toe the line financially.

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  • sibley's b'stard child says:

    @ 3

    Exactly, I posted an article a few days ago which stated that a third of all Support for Mortgage Interest recipients are pensioners (or was it over 60, I forget the exact terminology). Either way, it comes to something when the old biddies are in as much, if not more, trouble than ‘da yoof’.

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  • There daughter is supposedly a hedge fund manager so they shouldn’t starve .

    I’m thinking that other than a prison , the proper place for them is a very cramped hostel style social housing .

    This couple really do make a good case for bringing back the workhouse .

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  • ontheotherhand says:

    Think of all the fake GDP growth that was created by spending borrowed money; the mortgage arranger, the BMW dealer, Royal Ascott and theatres, the children’s schools, the daughter’s wedding, the estate agent for the son, the legal fees for the ‘I knew nothing so the bank/taxpayer should pay’ court case. Bit by bit the UK has been pledging more and more of the rights to its future income so that it can frontload spending, as private individuals and in national debt.

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  • Is this story a metaphor for what the Labour government have done?

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  • ontheotherhand said…Think of all the fake GDP growth that was created by spending borrowed money – excellent point which ties in with a frightening statistic given to me today by a very reliable source……………

    If it wasnt for Mortgage Equity Release during the naughties for how long would UK PLC have been mired in recession?

    Serious question and I await your relpies (or guesses if you prefer)

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  • mark wadsworth says:

    Jack C – what recession of the noughties?

    There was a bit of a downer when dot com bubble burst, but that was just money being transferred from rich stupid people to poor clever people (who became rich and clever). it was not fuelled by a credit bubble or anything. It’s not asset price bubbles that do the damage, it’s CREDIT bubbles.

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  • mark wadsworth – I’ll get to the point (my team’s just about to kick off) UK PLC GDP is roughly 65% dependent upon consumer spending (second only to the USA) and if it wasnt for MEW keeping things going during the noughties then it is estimated that the economy would have been stuck in recession for upto 8 years.

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  • little professor says:

    Very odd story. They say she had a mortgage for £850,000 on their home, but then say that when the house was eventually sold for £800,000, that she received half the proceeds. Half of what proceeds?

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  • mark wadsworth says:

    Jack C, but surely all economies are based on consumer spending?

    There’s no point earning money if you don’t spend it. Sure, mercantilists like Germany or China think that they can live by exporting, exporting, exporting, but what is the point of that? (and in any event, their economies are also based on consumer spending in other countries). In a perfect world, there’d be no trade surpluses or deficits.

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  • They did this in the wrong country. If this had been certain states of the USA, they could have walked away having suckered the banks, which makes me wonder just how many US citizens have deliberately done the same. Time will tell.

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  • ontheotherhand says:

    [email protected] you are right that the spending is required of course, but when we slapped ourselves on the back each year for a 2% GDP growth or whatever, was this just marginal growth in comsumption paid for with money that hadn’t been earned yet (and the scary thing is, much of it will never be earned = default) because productivity hadn’t increased? Look at all the products and services this woman consumed that would have been counted in GDP.

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