Debate House Prices
In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non MoneySaving matters are no longer permitted. This includes wider debates about general house prices, the economy and politics. As a result, we have taken the decision to keep this board permanently closed, but it remains viewable for users who may find some useful information in it. Thank you for your understanding.
Abbey LTV "threats"
Options
JonnyBravo
Posts: 4,103 Forumite
Well well well.....
Watched the news this morning and saw this all over the news.
http://news.bbc.co.uk/1/hi/business/7781043.stm
Fully expected to see a thread on here following discussions around this very aspect of margin calls a few months ago.
I have to say I was one of the group saying it'll never happen. If someone is up to date with thier mortgage why would a bank want to jeopardise that? Well it seems Abbey went through a phase of thinking about it even if they now claim to have backed away from it and say they won't be enforcing it.
Other banks were quoted on the news as saying they wouldn't be doing anything similar with most saying they had no such clauses.
To see it was even thought about is a stage further than I said it would reach, but I'm going to stick with my original view.
I can't see a bank being able to enforce it in any meaningful number without drastically increasing reposession.
Quote me on it.....
It won't happen.
Probably.
:rolleyes:
Watched the news this morning and saw this all over the news.
http://news.bbc.co.uk/1/hi/business/7781043.stm
Fully expected to see a thread on here following discussions around this very aspect of margin calls a few months ago.
I have to say I was one of the group saying it'll never happen. If someone is up to date with thier mortgage why would a bank want to jeopardise that? Well it seems Abbey went through a phase of thinking about it even if they now claim to have backed away from it and say they won't be enforcing it.
Other banks were quoted on the news as saying they wouldn't be doing anything similar with most saying they had no such clauses.
To see it was even thought about is a stage further than I said it would reach, but I'm going to stick with my original view.
I can't see a bank being able to enforce it in any meaningful number without drastically increasing reposession.
Quote me on it.....
It won't happen.
Probably.
:rolleyes:
0
Comments
-
On the news now they are saying that they are not "following it through". All rather odd.Happy chappy0
-
If you had searched you would have found some threads. Not where margin calls for lump sums have been made, but where offsetters had overpaid and Abbey dropped the mortgage levels so they could not recover some of their offset if they had planned too. Margin calls by the back door.
I have been watching this as I have a similar product albeit with a low LTV.
However, I still fear I may be in line for a cut as I have a low % tracker and could take all my savings out to get a better savings rate elsewhere thus costing Abbey. I can understand Abbey wanting to try and protect themselves from me drawing on their cheap resources.
Actually, I won't. I am all for peace of mind and I just prefer that my mortgage is being repaid than to have annual interest savings pots elsewhere.0 -
I had an interesting situation with my offset. As times were hard I was drawing down the offset to pay the mortgage ... and as I was making the payments the offset facility was increasing.
I wasn't close to the limit so never sat down and worked out what was going on, but they were certainly extending my facility just because I was keeping the payments up ... even though I was making the payments from the facility.0 -
If you had searched you would have found some threads. Not where margin calls for lump sums have been made, but where offsetters had overpaid and Abbey dropped the mortgage levels so they could not recover some of their offset if they had planned too. Margin calls by the back door.
I have been watching this as I have a similar product albeit with a low LTV.
However, I still fear I may be in line for a cut as I have a low % tracker and could take all my savings out to get a better savings rate elsewhere thus costing Abbey. I can understand Abbey wanting to try and protect themselves from me drawing on their cheap resources.
Actually, I won't. I am all for peace of mind and I just prefer that my mortgage is being repaid than to have annual interest savings pots elsewhere.
Ah right.
Whilst this is "less" worrying for the masses I'm still surprised. I guess it's very different to keep money already paid than to ask someone for £10k without any warning.
If people are offsetting (I do) I guess they need to be sure that if they do overpay they are sure they won't want it back. After all there is no difference between overpaying and keeping it in your linked account anyhow.
(Incidentally I do both... overpay as a way of saving which I can't get my hands on and save into my offset account)0 -
tomstickland wrote: »On the news now they are saying that they are not "following it through". All rather odd.
My experience of people moaning on the TV about how shoddily they've been treated by the bank on their mortgage doesn't bear close examination by-and-large.
What piqued the interest of Abbey in the first place do you think? I suspect they've missed a few payments and Abbey have said to them, 'Reduce your LTV as you're a bad risk.' They've gone running to the papers with the first part of the sentence but not the second.
It is interesting that this clause exists at all though. Despite a few threads about it on here and a few phone calls to banks I never found a mortgage that contained provision for margin calls. It seems that they do in this limited case.0 -
My experience of people moaning on the TV about how shoddily they've been treated by the bank on their mortgage doesn't bear close examination by-and-large.
What piqued the interest of Abbey in the first place do you think? I suspect they've missed a few payments and Abbey have said to them, 'Reduce your LTV as you're a bad risk.' They've gone running to the papers with the first part of the sentence but not the second.
It is interesting that this clause exists at all though. Despite a few threads about it on here and a few phone calls to banks I never found a mortgage that contained provision for margin calls. It seems that they do in this limited case.
I thought that too..... but....
Afraid not.
They had an interview with a couple who'd not missed any payments and had been sent the letter.
One complicating factor though.... they had agreed a loan to be able to withdraw further money to cover house repairs (the house needed doing up) upto 90% of value. They had bought the house and gone to withdraw the extra for the work only to be told "Sorry you're now at 90% due to your house value declining, and what's more if it goes down more you'll have to get it back to 90%"
The letters seem to have been more than one off letters judging from the tone of the report and Abbey did say they use a "computerised valuation" every month to work out LTV for everyone!0 -
Abbey shouldn't have been lending people so much money in the first place and then they wouldn't have to do this. They should have been demanding at least a 30% deposit.0
-
JonnyBravo wrote: »The letters seem to have been more than one off letters judging from the tone of the report and Abbey did say they use a "computerised valuation" every month to work out LTV for everyone!
I was going to say incredible but sadly it isn't. Amazing yes, incredible no.0 -
Abbey shouldn't have been lending people so much money in the first place and then they wouldn't have to do this. They should have been demanding at least a 30% deposit.
Infact abbey has been hard selling ppl who have been remortgaging!!!. Last year(4th Qrtr 2007) a friend remortgaged her house(which was with abbey on 2 yr period), the abbey rep kept asking her during that conversation whether she would like to borrow more despite my friend telling she did not want to borrow more!!
In a conversation of 15-20 minutes she was asked 4 times even though she had said no the first time. She is grateful that I had told her not to borrow more as she had 77% LTV and in the scenario of the US(at that time in 2007) I was expecting UK to follow suit into recession.
She found out last month that due to computer valuation(abbey base it on the Halifax Index) her LTV is now 86%.
I would blame Abbey if she had taken the money then and now gone beyond 90%. Even though all of us are responsible for every penny we borrow if the lender hard sells and the borrower borrows but is not told explicitly that if her LTV goes beyond 90% she would have to pay it back then it is a case of misselling!!.
My friend needed to do up her house but on friendly advise from some of us decided to wait until the recession settles down. Though she can easily afford to pay the added monthly outflow surely she can not afford topay abbey just because after 1 year they had a change in heart and want the monmey back because the LTV is now 90%
Trust the banks to push the blame on borrowers!!:beer::beer::beer:0 -
It is well known that Margin calls are written into buy to let contracts. HBOS and Bradford & Bingley are triggered at 85%. So with a say conservative 15% fall in prices these banks should be starting to invoke the margin calls now.
:eek:
http://money.uk.msn.com/investing/articles/john-stepek/article.aspx?cp-documentid=8219215Another, less well-highlighted point, is that many buy-to-let investors are facing "margin calls". Buy-to-let mortgages tend to contain clauses that say you must maintain a certain amount of equity in the property.Both HBOS and Bradford & Bingley, the top lenders in the sector, ask for the maximum loan-to-value to be maintained at 85%. So if prices are falling, the owner will need to top that up with hard cash when they come to remortgage. We're talking thousands of pounds they almost certainly won't have.:exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.
Save our Savers
0
This discussion has been closed.
Categories
- All Categories
- 343.6K Banking & Borrowing
- 250.2K Reduce Debt & Boost Income
- 449.9K Spending & Discounts
- 235.7K Work, Benefits & Business
- 608.7K Mortgages, Homes & Bills
- 173.3K Life & Family
- 248.3K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards