Mortgages delayed 2 years - let's wait and see?

WTF?_2

purch wrote: »

No, but I am assuming that the situation in the general economy, and especially the housing market won't have improved hugely in that time span.

You don't see inflation erupting at some stage as all the money finally fills the money pit?

That would change the situation as regards the housing market and stock market, in nominal terms at least.

neverdespairgirl

Seems to be increasingly true that the scheme is spin, at the moment:

Fears were growing tonight that Gordon Brown's £1billion mortgage lifeline will fail to reach tens of thousands of homeowners at risk of repossession.

Ministers feverishly backtracked on initial estimates that only 9,000 borrowers would benefit, as questions about who would be covered went unanswered.

Despite being unveiled with great fanfare by the Prime Minister in the Commons, few details of the package have been nailed down.

And several major lenders - named by the Government as supporters of the scheme - privately insisted that they had still to fully sign up.

It provoked claims that Mr Brown had rushed out the surprise announcement to steal positive headlines on a day of drama in the Commons over the arrest of Tory MP Damian Green.

http://www.dailymail.co.uk/news/article-1091585/Fears-grow-Browns-envelope-mortgage-bailout-Beckett-suggests-9-000-benefit.html


Peston reckons it'll not be that significant as a spike in repossessions is likely to be lead by sub-prime and second mortgage holders:


Anyway, if Coogan is right and the repossession increment is principally caused by a rise in arrears at firms providing subprime and secondary mortgages, then it will be harder for any government policy to reduce the rise in repossessions.

How so?

Well, with the future so bleak for subprime and specialist lenders - in the sense that they were too dependent on wholesale markets that are unlikely to recover for years, if at all - those lenders are primarily interested in getting their money back as soon as possible.

And as their borrowers fall into difficulties, these lenders may have little incentive to help those borrowers over the hump - even if they receive support from Gordon Brown and taxpayers, as per yesterday's mortgage guarantee scheme.

http://www.bbc.co.uk/blogs/thereporters/robertpeston/2008/12/a_british_subprime_mess.html

And even Mandleson won't say it's agreed:

Lord Mandelson has failed to quell claims the government has yet to reach a deal with the banks over its mortgage interest relief plan.

The business secretary told BBC News the government was "working together" with the banks on the plan.

But pressed repeatedly on whether they had reached a deal yet, Lord Mandelson declined to comment.



http://news.bbc.co.uk/1/hi/uk_politics/7764125.stm

dopester

silvercar wrote: »

He'll never sell until forced, that's the problem.

2 years ago he could have sold for 550k and bought a smaller property out right.

Now, given the fall in house prices and the deteration of the house, he would get 400k max and would need a 50% LTV mortgage to buy a smaller place. But he won't move even now, keeping his home for his family is number one priority; even though they would all be happier with more money to spend in a better maintained smaller house.

Yes. We already see it expressed here near daily. People underestimating the downturn and expecting the recovery to be here within a couple of years. Green shoots. The owner's luck might have picked up, they may think, by then, with new job and nice pay packet. So less pressure to adjust to market circumstances.

IveSeenTheLight

purch wrote: »

No, but I am assuming that the situation in the general economy, and especially the housing market won't have improved hugely in that time span.

But house reposetions / mortgages are not linked to the general economy.
they are specific cases and allowing 2 years for circumstances to change as opposed to 3 months will help a lot of people cope / agree an alternative option in difficult circumstances

andrewmp

silvercar wrote: »

From January, anyone on income based benefits will see the interest on their mortgage paid upto a max of 200k's worth after 3 months.

Accepting that people don't get repo'd within 3 months, what does this new scheme do?

Only people it will effect will be those with mortgages over 200k, so they can defer the interest.

Are there really that many people who have been given mortgages over 200k that won't have any savings? Chances are most people with large mortgages will have had a deposit, so won't be in negative equity and would have had the option of selling.

True but the interest rate they'll pay will be very very low, many people on fixed rate products will be screwed or maybe this new scheme will help them.

dopester

IveSeenTheLight wrote: »

surely the position would still be available / filled given that the person in your scenario chose not to take the position.

When the position is filled then that position would be helping the economy... pay their taxes, help recovery etc.

The world doesn't grind to a halt because of the decision the person in your scenario might take.

Not always by the most suitable or best candidate though. Sorry.. I'd just been reading the biography of Charles Steinmetz.. ..the moneyless 5ft hunchbacked German immigrant... refused admission to the USA on arrival in 1889 and set for deportation until narrowly gaining entry after some quick thinking intervention by a travelling companion. USA and the world would have probably been held back many years if his discoveries and scientific and mathematical abilities had not been allowed to find the outlet they did.

IveSeenTheLight

dopester wrote: »

Not always by the most suitable or best candidate though. Sorry.. I'd just been reading the biography of Charles Steinmetz.. ..the moneyless 5ft hunchbacked German immigrant... refused admission to the USA on arrival in 1889 and set for deportation until narrowly gaining entry after some quick thinking intervention by a travelling companion. USA and the world would have probably been held back many years if his discoveries and scientific and mathematical abilities had not been allowed to find the outlet they did.

so he only managed to achieve this because he gained entry to America.
He would not have been able to use his mathematical abilities and scientific discoveries anywhere else in the world

The world would have had many more deaths if it was not for Alexander Fleming.
Good job he was admitted to the good old US of A :beer: **NOTE** He did not go to America
Incidently, One of my tenants is a German Professor who has made breakthrough on combating the MRSA virus.
He would not have been able to do so if I had not let out my house **NOTE** He would have, but just resided elsewhere