GG's solution

Generali

Gorgeous_George wrote: »

It is simply wrong to force people to move to Northern Rock's SVR (at 7.49%) when NR are jointly responsible for the mess that the borrower finds himself in.

With LTVs created by lax lending (and incompetent borrowing), some borrowers cannot choose a different deal. These are the people least likely to be able to afford the higher rates.

It would be better to keep people in their homes, paying what they can afford and at a rate that the lender can accommodate (Rather than pump billions into the economy, guaranteeing 20%, 30% of people's mortgages would ease the pain). The only option for many borrowers is repossession and bankruptcy leaving the tax payer/other customers to fund the bankruptcy and provide social accommodation. It must be cheaper to keep them in their homes.

GG

2 thoughts:

If it's wrong for a borrower to have to pay the SVR, why is it right to force a business to sell their wares at less than cost price?

If problems have been caused by lax lending and borrowing, why should it only be the lenders that pay?

baby_boomer

Of course we wouldn't need many of GGs regulations if the banks behaved responsibly.

And the banks might behave responsibly if they thought that governments wouldn't bail them out.

Gorgeous_George

Both pay.

Maybe limiting the remortgage to BR+1% should be partly funded by the regulators who didn't.

It cannot be in the lenders' best interests to force repossession. The borrower can 'simply' go bankrupt and the lender gets nowt (or very little).

Lenders (and the Government if necessary) need to work with the borrower to find a more acceptable solution. In many cases, I am confident that it would be cheaper to keep people in their homes.

GG

wrighty1969

It cannot be in the lenders' best interests to force repossession. The borrower can 'simply' go bankrupt and the lender gets nowt (or very little).

Normally it would be in the lenders best interest to repossess as the property will be sold at auction, and the lender will claim on the MIG insurance taken out at the time of the loan...and if that still does not cover it, the borrower is still liable for the remainder.

DirectDebacle

History has a habit of repeating itself and as there was a housing price crash in the late 80's/early 90's well surprise surprise here we are again. The causation is different but the effects are the same. People are going to get hurt, many through their own imprudence and some, through no fault of their own, are going to suffer too. There was bound to be fallout from the feeding frenzy of credit fuelled by greed and not productivity.

Generally house prices are only relevant if you are buying one or selling one. Otherwise they are only notional. In some ways this will be a healthy period of re-adjustment like a moorland catching fire and growing back stronger than it was before. The housing market needs to be taken back to its roots. That is the days when people bought a house to turn it into a home to raise your family over a long period of time. A house was never intended to be a cash cow to be regularly raped in order to buy cars, holidays or a security device to obtain and max out on as many credit cards as you could. Those that did so will now learn a hard lesson as will those that provided the lending. Unfortunately they will drag some down with them others who did not act irresponsibly. Not all bank employees were six figure bonus bloated fat cats. Many were secretaries or other low paid backroomstaff who because of the greed and recklessness of their bosses will now find themselves out of work and in real danger of losing their homes with no golden parachute to soften the landing.

Other sectors of the economy will also suffer with job losses and cut-backs. Times will be tough for a couple of years or more but will improve. In the meantime house prices have yet to fall a lot more and lenders have to learn to lend responsibly again and borrowers to borrow within their means. There is no quick fix or easy way out and undoubtedly people will lose their homes.

Good riddance to the buy to letters and the builders who filled the city centres with tacky two bed boxes for them to buy. A return to sanity is well overdue and with it will come the opportunity for 1st time buyers to get in the housing market and the realisation that not everybody can actually afford a house. Councils could compulsory purchase the empty or unfinished buy to let projects and let them at reasonable rents to the less well off. Years ago I heard of something called council houses/flats. What a good idea they were.

Ephemera

PasturesNew wrote: »

I never vote.

Why not?

Is it because you think your vote doesn't count?

If you don't vote, you have no place moaning about who's 'in charge' because you didn't do your bit to influence the result!
The current labour govt was voted in by a very small number of people, relative to the entire population. I can't be @r$ed to find the figures right now but it certainly was significantly less than 50% of the voting population. That is scary. So if everyone that COULD vote actively DID vote, we will certainly get the government we deserve...

And I did vote in the last election, and not for the current bunch of muppets!

And if you think you're too small to count, you've never been in bed with a hungry mosquito...:D

Ephemera

I vaguely remember the 1970s crash (as a wee babby), walking with my Mum through the snow (yes, it snowed here in the South!!) to get milk and bread, the blackouts, the rubbish collecting in back gardens, etc etc. That also was the result of a Labour tax and spend policy something similar to what we see today.

Forget the crashes of the 80s and 90s. This has all the hallmarks of being much worse.

Think somewhere between the 1929 crash and the 1970s... I really hope it won't be that bad but it's going to get a LOT worse before it gets any better.

This site is going to save a lot of people's bacon, and I wish everyone all the best. And, of course, these are only my own opinions!!!