Some of you are vultures

greenwheels007

Talking of setting fire to houses there was mortgage debt counsellor on the phone the other day.
He is hired by banks to visit people who are in mortgage debt and try and help them out. He made a few interesting points.
His business is booming (nice bloke though, didn't say it gleefully!)
A significant number of people are just walking in to the bkank and saying 'there's the keys, I'm off!'.
There are also loads of cases of people being threatened with reposession trashing their houses. Seems odd as it will sell for less and their debt will be bigger...
...but that's human nature for you!

mr.broderick

greenwheels007 wrote: »

Talking of setting fire to houses there was mortgage debt counsellor on the phone the other day.
He is hired by banks to visit people who are in mortgage debt and try and help them out. He made a few interesting points.
His business is booming (nice bloke though, didn't say it gleefully!)
A significant number of people are just walking in to the bkank and saying 'there's the keys, I'm off!'.
There are also loads of cases of people being threatened with reposession trashing their houses. Seems odd as it will sell for less and their debt will be bigger...
...but that's human nature for you!

In America if you hand the keys back and your house is sold or less than what you owe they can't chase you for the difference, here however in the uk i think they can try and get the shortfall.

neverdespairgirl

mr.broderick wrote: »

In America if you hand the keys back and your house is sold or less than what you owe they can't chase you for the difference, here however in the uk i think they can try and get the shortfall.

Depends. It is on a state-by-state basis. Some have "no recourse" provisions for mortgages (give the keys back, bye-bye mortgage), some don't.

greenwheels007

What happens if someone is in negative equity and mortgage arrears and they chuck the keys in then declare themself bankrupt.
Can they be chased for the debt?

**I am honestly not in this position myslef, just being nosey!**

mr.broderick

greenwheels007 wrote: »

What happens if someone is in negative equity and mortgage arrears and they chuck the keys in then declare themself bankrupt.
Can they be chased for the debt?

**I am honestly not in this position myslef, just being nosey!**

No you just won't get any chucky for the rest of the millenium

DirectDebacle

neverdespairgirl wrote: »

Depends. It is on a state-by-state basis. Some have "no recourse" provisions for mortgages (give the keys back, bye-bye mortgage), some don't.

Over here a new lending policy will emerge (with or without legislation). When the banks finally start to lend to each other (and us) they will build in 'neg equity insurance' for themselves by demanding higher and higher deposits. A lot to be said for 'once bitten, twice shy'. My only fear on this is that they go too far and extend market stagnation by too strict a criteria on FTB who are the lifeblood of the market.

phil1873football

Here's a thought, if all these people who bought their house in the last few years (including myself) decide never to sell because they won't get back what they paid for it (because they can't afford to make that sort of loss), won't that mean loads of FTB's chasing after the very few homes that are for sale, therefore, pushing prices back up.

Just a thought...shoot me down if you so feel the need!!

mr.broderick

DirectDebacle wrote: »

Over here a new lending policy will emerge (with or without legislation). When the banks finally start to lend to each other (and us) they will build in 'neg equity insurance' for themselves by demanding higher and higher deposits. A lot to be said for 'once bitten, twice shy'. My only fear on this is that they go too far and extend market stagnation by too strict a criteria on FTB who are the lifeblood of the market.

I think lower deposit borrowers pay a higher lending charge (correct me if i am wrong) which safeguards the lender of any shortall if the borrower defaults in negative equity.

mr.broderick

phil1873football wrote: »

Here's a thought, if all these people who bought their house in the last few years (including myself) decide never to sell because they won't get back what they paid for it (because they can't afford to make that sort of loss), won't that mean loads of FTB's chasing after the very few homes that are for sale, therefore, pushing prices back up.

Just a thought...shoot me down if you so feel the need!!

It is not a thought that is exactly what will happen.

TDS_2

mr.broderick wrote: »

...people taking advantage of low interest rates and probably sick of losing money on their savings

1. A mortgage is a long term commitment (25 years?), so anyone tempted to buy on the basis of low interest payments for the first 2 or 3 years isn't thinking this through. AFAIK longer term fixes are still about 5%, which is nice, but unlikely to sway anyone.

2. If those savings are being put toward a deposit on a house, then as long as (nominal) house prices are falling, you're not 'losing' money. Even w/o earning any interest, every drop in prices 'adds' to your deposit, and reduces your eventual mortgage.