Friday, August 30, 2013

And all because the lady loves hpi-tray

Bank of England: consumers turn to loans, credit cards and overdrafts

Consumer credit grew last month at its fastest pace since December 2008, as households resorted to personal loans and overdrafts to maintain their standard of living in the face of falling real wages.

Posted by dill @ 12:49 PM (2724 views)
Please complete the required fields.



11 thoughts on “And all because the lady loves hpi-tray

  • Yup, the Credit Union where I volunteer was overwhelmed last month.

    Expenses costs are rising faster than income. No wonder all these people are ringing me up asking me if it’s time to buy that new freezer/unlock my pension/take out a loan.

    Reply
    Please complete the required fields.



  • Who said ‘Spend, spend, spend’ ?

    Reply
    Please complete the required fields.



  • mark wadsworth says:

    Alan, what sort of debts have your punters run up before they turn to your CU?

    Reply
    Please complete the required fields.



  • There are lots of older people out there who live on a basic state pension or other benefits etc. who just cannot afford to run and maintain a house. Many of them would love to downsize from their 2.5 bedroom semis and pay off their debts, but there is nowhere for them to go. Years ago people used to retire to caravan parks / park homes cheaply.

    Reply
    Please complete the required fields.



  • MW,
    For obvious reasons I can’t be specific.

    The CU expects people to be savers already before giving out larger loans (as opposed to smaller emergency loans for washing machines, family bereavement, school uniforms, etc).

    As Max Kaiser says, we are suffering an interest rate apartheid in the UK. If you are a bank, then you pay the BoE about 1% (and speculate), if you have no credit history or a bank account then its 4,000% from PayDay lenders like Wonga.

    Reply
    Please complete the required fields.



  • @alan – There are lots of small credit unions in ROI, the problem they face is the there debts are unsecured so when Crunch time comes people are told by the secured lenders (banks) to default on the credit union loans.

    http://www.independent.ie/business/personal-finance/latest-news/credit-union-says-pay-loans-before-mortgages-29535917.html

    Quote:

    ONE of the largest credit unions is on a collision course with regulators after telling thousands of its members to keep paying back their loans even if they are in trouble with their mortgages. St Raphael’s Garda Credit Union – a national credit union, membership of which is only open to gardai and their families – has denied it is encouraging its members to “strategically default”.
    This is the jargon used by bankers to describe people they say are not paying their mortgages and instead are using their limited income to either pay other loans, or buy food for the families. Others are defaulting to fund holidays, the bankers claim.
    The latest newsletter from St Raphael’s tells its 31,200 members to think again if their bank is telling them to stop paying their credit union loans so they can meet their mortgage payments.
    Regulators are convinced a large proportion of the 100,000 homeowners in arrears could get on top of their problems if they stopped paying their credit union loan, or reduce the amount they are repaying.

    TEST
    A pilot study is being put together by the Central Bank to test this.

    But the Irish League of Credit Unions walked out of talks with bankers and regulators aimed at setting up the pilot project.

    Now St Raphael’s states in its latest newsletter: “It would seem the banks are encouraging people to stop paying their credit union loans. The argument that ‘secured loans’ such as mortgages should take precedence over all other types of loans, including credit union loans, is really gathering momentum from everywhere at the moment.”

    The front page newsletter piece goes on: “So, if your bank is telling you to stop paying your credit union, think again. Is it really in your best interests or theirs?”

    Director of the Irish Mortgage Holders’ Organisation David Hall accused credit unions in general of failing to realise that a person’s first priority must be to protect the home.

    “It is not much use having access to credit through a credit union loan if you lose your home,” Mr Hall said.

    RANKS

    His organisation represents up to 70 gardai of all ranks who are at risk of losing their homes. Many of these have second properties, he said.

    Most gardai have credit union loan repayments deducted from their salaries by the Garda payroll system, Mr Hall said. He claimed it was proving very difficult for gardai to reverse this situation so they can divert all funds to sort out a mortgage in arrears.

    St Raphael’s and St Paul’s, the garda credit union in Cork, has been among the most active creditors in the courts, securing registered and unregistered judgments against borrowers in default.

    A spokesperson for St Raphael’s said: “We are not saying do not pay your mortgage, we completely understand the importance of maintaining payments on a family home. However, we are saying that there should be a balance in relation to prioritising repayments and that credit unions should not be excluded from any repayment scheduling, because very often credit unions are the only source of available credit to our members.”

    So there we have it, the banks attempting to crush other lenders.

    Reply
    Please complete the required fields.



  • mark wadsworth says:

    Alan, of course you can’t be specific and I wouldn’t want you to be, I just wonder what it looks like at the coal face of the debt mountain.

    Reply
    Please complete the required fields.



  • MW,
    Bleak. It’s not so nice dealing with people who are chased and hassled for just a few hundred quid and without bank accounts. I’d call most of them “honest/straight”.

    Reply
    Please complete the required fields.



  • Debt recovery still a recovery?

    Reply
    Please complete the required fields.



  • Alan, thanks.

    Reply
    Please complete the required fields.



Add a comment

  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user´s views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>