'Second wave' repossession threat

Really2

http://news.bbc.co.uk/1/hi/business/8199933.stm

Get that feeling shelter are trying to get more done to stop repos for the long term.

Cannon_Fodder

CML's full press release; http://www.cml.org.uk/cml/media/press/2357

"But while today's figures reflect the efforts being made to manage mortgage arrears and avoid possession if possible, there can be no complacency about the potential scale of future payment problems. While the economy remains weak and with unemployment still growing, arrears and possessions are likely to rise in the second half of the year."


While repossessions are only up 14% on last year, the numbers in arrears is up 45% on last year...

It was only the start of the year that Lenders switched from 3 to 6 months of arrears before seeking possession, so the Q2 figures are likely to be benefitting from that, plus whatever handful have navigated their way through the various, complicated Govt schemes.

It'll take another 6-12 months to reach the peak of repossessions, I suspect. By which time, the Government schemes will start running out, causing a "double-dip" in repossessions...

Found some interesting figures on the Govt rescue scheme;

http://www.communities.gov.uk/documents/housing/xls/1312376.xls

6,905 approaches, Jan-Jun 2009...Households accepting an offer through the scheme...15.

There are however other stages to the process of considering an approach, with Lenders asked to freeze their possession process while it goes on, so the long-winded bureaucracy is buying some people some time...but when they don't get an offer under the scheme, they then go back to being treated as a "normal" repossession presumably, and will appear in Q3 or Q4, I guess.

chucky

Cannon_Fodder wrote: »

It'll take another 6-12 months to reach the peak of repossessions, I suspect. By which time, the Government schemes will start running out, causing a "double-dip" in repossessions...

have to agree with this - the government are probably hoping that everything will be sorted by then and the worst is behind them...

the dependencies will be mortgage rates and the impact of unemployment...

Graham_Devon

FallenAngel9898 wrote: »

Although I take no pleasure from people losing their homes, this kind of news is inevitable considering the position the UK is in, unemployment rising, low IR's that only pretty much have one way to go and a government/media determined to encourage people to borrow money and get into more debt, whether that be consumer spending or the housing market.

The debt we are are carrying is as unsustainable as it was 18 months ago, the only difference is it's become a little easier to service due to rate cuts, however these rates aren't going to last, especially over a typical 25 year mortgage.

The ending of the recession at some point won't help either, as we couldn't afford the debt 18 months ago when we were booming, and that is not taking into account reductions in disposable income as taxes rise to pay for the debt.

Totally agree.

We are in exactly the same position as 2007.

Only difference is, the whole economy has had to change to allow for people to carry on.

We still have all the debt, we still have all the problems. But, what we have now got, is an economic policy which allows those problems to continue, but not neccesarily fix them.

Trouble is, we can't go any further with this economic policy, unless of course we decide to bankrupt ourselves.

2007 will arrive again. Were just holding off the inevitable.

When the inevitable will come is getting more and more blurry.

dopester

Following on CAG forums the repossession requests for help, (or 'possession' as some people insist it should be called) has been very limited for a few months.

Bit of new forum activity now.. so that may be a hint lenders are beginning to crack down where necessary. You can't rescue every debt. You just can't. It isn't some closed market where renters should be expected to remain in rented whilst the beautiful precious-ones have everything given to them to keep them in the mortgaged homes.

Elsewhere I've read of people who've stopped donating to Shelter, and I understand why. TBH I believe they are involving themselves in a harmful way.

It hurts more people in the long run by trying to delay the necessary correction. Makes the depression much longer and a lot more painful, stopping good money coming through, and further puts off any real chance of the system adjusting for any real economic recovery.

"Despite many lenders using more tolerant measures to help their customers, further action is needed if we are to prevent a second and more devastating wave of repossessions," said Shelter director of policy, Kay Boycott.

She called on lenders always to consider allowing homeowners in arrears to move their mortgage from high fixed-rates onto low variable rates, while waiving any redemption penalty charges.

Dan:_4

FallenAngel9898 wrote: »

The debt we are are carrying is as unsustainable as it was 18 months ago, the only difference is it's become a little easier to service due to rate cuts, however these rates aren't going to last, especially over a typical 25 year mortgage.

Is it easier to service though, because while mortgage costs may have come down for those on a tracker or SVR, personal loans will be fixed and credit card APR is going up, sometimes as much as 35%!!! and it's not as easy to get a nice 0% deal these days, im struggling with a nice A+++ credit rating.

There is a huge margin between the base rate and fixed mortgage rates at the moment, much more then the historic 2%, so when base rates rise it may only effect those on a tracker/SVR (and to be honest they have had a nice 12 months) and not those taking out fixed rate products, as the gap closes in.

SingleSue

One thing I have noticed recently on the mortgage board (and elsewhere on the site), is the amount now coming off trackers onto SVR and finding their payments are several times what it was before (in one case, 9 times more) and people struggling to pay that or find a better deal.

I must admit after reading all the 'good' news over the last few months and hoping it was correct, that the signs are not as good as being portrayed...think there is a huge store eekness to come.

Goodness knows what will happen when interest rates start to rise which they will have to do eventually (probably not in the next 6 to 12 months though), coupled with more and more people coming off time limited trackers or low fixed rates and not enough equity to now realise the better deals being offered.

lemonjelly

Cannon_Fodder wrote: »

CML's full press release; http://www.cml.org.uk/cml/media/press/2357

"But while today's figures reflect the efforts being made to manage mortgage arrears and avoid possession if possible, there can be no complacency about the potential scale of future payment problems. While the economy remains weak and with unemployment still growing, arrears and possessions are likely to rise in the second half of the year."


While repossessions are only up 14% on last year, the numbers in arrears is up 45% on last year...

It was only the start of the year that Lenders switched from 3 to 6 months of arrears before seeking possession, so the Q2 figures are likely to be benefitting from that, plus whatever handful have navigated their way through the various, complicated Govt schemes.

It'll take another 6-12 months to reach the peak of repossessions, I suspect. By which time, the Government schemes will start running out, causing a "double-dip" in repossessions...

Found some interesting figures on the Govt rescue scheme;

http://www.communities.gov.uk/documents/housing/xls/1312376.xls

6,905 approaches, Jan-Jun 2009...Households accepting an offer through the scheme...15.

There are however other stages to the process of considering an approach, with Lenders asked to freeze their possession process while it goes on, so the long-winded bureaucracy is buying some people some time...but when they don't get an offer under the scheme, they then go back to being treated as a "normal" repossession presumably, and will appear in Q3 or Q4, I guess.

Cracking post. :T

Working in the advice sector, I agree there are numerous ways a repossession can be delayed, for up to 2 years realistically.

The impact of mortgage arrears really isn't being highlighted, as it will seriously impact on the economy. Levels of mortgage arrears has been steadily increasing. Ultimately the lenders are going to recover the assets to protect their interests.

The mortgage rescue scheme is farcical, and no-one knows what will happen to it or homes bought by HA's through it in 3 years time.

The housing market will be affected by this in 2010 IMO, especially as unemployment will continue rising.

PS you might wanna cut&paste this over to the "where's the market going" thread for food for thought there too.

Pobby

Came across this

http://www.youtube.com/watch?v=vGx-XS3J7fY

What planet is he on?

Heyman_2

lemonjelly wrote: »

Working in the advice sector, I agree there are numerous ways a repossession can be delayed, for up to 2 years realistically.

Good to know

If I was put in the position of potential repossession (could happen - if I lost my job), I'd be wanting to put it off for as long as humanly possible whilst I tried to get some money coming in any way I could. :money:

andygb

Singlesue highlighted the problem with people coming off tracker mortgages, then we have rising unemployment, the knock on effects of the latter, interest rate rises - which are inevitable. There are so many people who have bought properties at falsely inflated prices, and there are so many more people who cannot get a foot on the ladder. If you add to this the numbers of people who are just being very prudent, then the property market is going to come to a standstill, and no amount of QE will fix it.
I am a very fortunate person, but I realise that. I live in my first purchase (17 years ago), and have ignored the oppotunities to "cash in", because it doesn't really work out like that. There are many more who are not as fortunate as myself, and I feel for them, because they are only trying to achieve something quite normal.
I do not know where this is all going to end, but I would like totry to form some kind of group, who are going to stand against the "ruling elite", and say "enough". The money which has been given to the banks, should have been channelled into reducing mortgage debt, on a proportionate scale.
If we simply look at one notorious lender "Northern Rock", we see that they are repossessing houses at a frightening rate - why are they allowed to?
The government introduced the scheme to help borrowers who were struggling, but since it was introduced it has helped only 15 borrowers. Where has all the money and effort gone?
We elect these charlatans, we should be holding them to account, but then again this is England, and we just moan and shuffle away to sit in front of our television sets, and watch another enthralling episode of Eastenders/Emerdale/Coronation Street.
I do write to my MP, but I guess he is getting a little fed up of my "ear bashing", so I no longer get any feedback.
How do we change things?
If we do not change things for the better, then there are going to be millions of angry people on the streets, and it is not going to be very pretty.