DM: Plight of 1.1m stuck in homes they can't sell

Orpheo

HAMISH_MCTAVISH wrote: »

Nonsense.

Nonsense.

HAMISH_MCTAVISH wrote: »

It's because of the opportunity to profiteer from rationing a limited pool of available funding through price.

Nonsense.

HAMISH_MCTAVISH wrote: »

It's mortgage rationing, plain and simple, and it will gradually reverse as confidence grows, liquidity returns and competition increases in the mortgage lending market.

Nonsense.

HAMISH_MCTAVISH wrote: »

As we have already clearly seen with a steady improvement in LTV requirements and rates over the last year.

Steady improvement in LTV requirements for borrowers who can prove a history of low risk.

Procrastinator333

HAMISH_MCTAVISH wrote: »

Nonsense.

It's because of the opportunity to profiteer from rationing a limited pool of available funding through price.

It's mortgage rationing, plain and simple, and it will gradually reverse as confidence grows, liquidity returns and competition increases in the mortgage lending market.

As we have already clearly seen with a steady improvement in LTV requirements and rates over the last year.

If lenders genuinely didn't think there was any risk of prices falling, why would they not offer lower LTV products with higher rates. Say 5% deposit, 7% interest rate.

If they think prices are going up, they should have no concern about their capital as they can reposes, so why not go for the higher rate?

Imo, the truth is probably somewhere between the 2. Slightly hesitant about the direction of prices, limited funds, so might as well play it safe.

lemonjelly

ILW wrote: »

The WHOLE of the blame lies with the borrowers, they were adults after all.

You don't think that the lenders should bear ANY responsibility to ensure that the borrower is able to repay? Like a person in their 60's taking out a 20+ year mortgage?

ILW

lemonjelly wrote: »

You don't think that the lenders should bear ANY responsibility to ensure that the borrower is able to repay? Like a person in their 60's taking out a 20+ year mortgage?

Assuming they were adults of sound mind and not suffering a learning disability. I am sure they had no trouble spending the money.

lemonjelly

ILW wrote: »

Assuming they were adults of sound mind and not suffering a learning disability. I am sure they had no trouble spending the money.

You're missing the point. They have a duty of care towards the lender to ensure that they are buying a product which they can afford.

At the same time, the staff have a duty of care towards the employing financial institution to ensure that they are lending the banks money appropriately, & the bank will recover its money plus interest.

So the assertion stands. Surely the lenders bear some responsibility.

Graham_Devon

To use the burglar analogy...

If I put some signs up along the road, stating there is a car with it's keys in, ready to be driven away, just follow the signs. Leave my doors open, with a banner on the house saying "cash upstairs, LCD TV, laptop and Omega watch in kitchen drawer". Would the burglar be TOTALLY to blame because I didn't force him to haul all my goods into my car and drive off with them?

I doubt the insurance company would pay up, as I would be being something called negligible. I also doubt I would get much sympathy.

LydiaJ

I don't think it would lessen the extent to which the burglar was to blame, although I would have more sympathy with him/her for succumbing to temptation. I wouldn't support a decrease in sentencing on those grounds. I would think that it made you "to blame" as well, though - as in you could blame yourself or your insurer could blame you. I wouldn't agree that the burglar could legitimately blame you. If I were your insurer I wouldn't pay up.

Likewise, I don't think the constant pushing of credit lessens the blame attached to the stupidly endebted, although I do feel more sympathy with them because of the temptations to which they were subjected. The banks are also "to blame" in that it's legitimate for their shareholders to blame them, and for the bailing out taxpayers to blame them. I don't agree that the endebted have any right to blame the banks for lending them the money.

harrup

lemonjelly wrote: »

You're missing the point. They have a duty of care towards the lender to ensure that they are buying a product which they can afford.

At the same time, the staff have a duty of care towards the employing financial institution to ensure that they are lending the banks money appropriately, & the bank will recover its money plus interest.

So the assertion stands. Surely the lenders bear some responsibility.

My initial gut instinct was " Duty of care???? How laughable! They aren't doctors,nurses, teachers ... they aren't our PARENTS........but a business... in the business of making money from lending money. So why do they have a duty of care?"

And yet, and yet...

There is something to that assertion. We bestow a degree of trust on banks...and bankers. Since they aren't merely some shady loansharks but a ( at least formerly) respectable institution. And if they deem a loan perfectly acceptable, well then...

Nonetheless, taking on neck deep debt and then holding the bank responsible when it goes pear shaped is irresponsible if not downright puerile.

At some stage, I suppose, we all have to decide whether we should forfit our rights to be fully fledged adults with rights AND responsibilities....or.... decree that we simply can't be held accountable for our actions and thus hand back most of our rights and responsibilities.

What isn't reasonable to expect IMO is to choose at random when we want to be what. That's what kids do. That's what teenagers do. That's why they don't have the same rights or responsibilities.

And nor can they apply for a mortgage.

If you are saying that lenders should share the responsibility, that they have a duty of care, are you thus effectively saying saying we have regressed to be perpetual children?

Scary thought, that one. But likely not untrue.

Thrugelmir

harrup wrote: »

My initial gut instinct was " Duty of care???? How laughable! They aren't doctors,nurses, teachers ... they aren't our PARENTS........but a business... in the business of making money from lending money. So why do they have a duty of care?"

Its not so much a duty of care to borrowers but depositors and investors. As its your savings they are lending to someone else. Banks aren't taking any risks themselves directly as its somebody elses money.

Jowo_2

Sibley wrote: »

I'm glad people can see its a dead market now. Cutting the price wont sell your home only attract the wrong type of buyer. Better just sit it out. Wont take long to get back to normal.

Funny you should say that. My friend reduced the price on her flat to try and shift it and has subsequently suffered two timewasters.

The first was a cash buyer who pulled out two weeks after the offer after her father convinced her that the market would tank.

The second was a buy to let landlord wanting a property to rent to their niece who never instructed a solicitor after negotiating a 10k reduction in the asking price and who the estate agent was annoyed to find is still viewing other properties....

The estate agent says he regularly shows properties to people who have been sitting out the market for up to two years waiting for huge price falls that haven't materialised and are too nervous to enter the market.