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DM: Plight of 1.1m stuck in homes they can't sell
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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?
Lenders have a duty of care to their shareholders so the profit that they make from a loan has to be weighed against the risk of a partial or total loss.
A bank is very unlikely to make a total loss on a mortgage as it is a secured loan. However, the possibility of a partial loss is real and credit checking and confirming that a borrower appears to be able to afford the repayments are legitimate ways for a bank to protect its owners.0 -
do you think banks are not lending to businesses and companies because they're expecting lower house prices too?There seems to be a general lack of understanding as to why, in the current environment, lenders are demanding larger deposits. It is not arbitrary nonsense, it means that there is equity in the property which may serve to protect the lender's stake should they be forced to repossess. It appears that the banks anticipate falling prices.0 -
I'm stuck in a home i can't sell because it's in negative equity...A lot of people are proving stubborn, but very few people are genuinely "stuck in homes they can't sell"
I'm certain there's a price almost any of them could sell at, they just refuse to. which is their choice so they shouldn't complain about it...saving up another deposit as we've lost all our equity.
We're 29% of the way there...0 -
twirlypinky wrote: »I'm stuck in a home i can't sell because it's in negative equity...
Did you buy right at the top of the boom?
I nearly did, so you have my sympathies!0 -
Daily Mail = not going to be the most accurate source of info...Procrastinator333 wrote: »It is often suggested that if prices drop, people just take property off the market, supply goes down and prices stabilise.
The opposite also appears to be at work. If prices start to rise, these guys will flood the market, increase supply and stop the rises.
http://www.dailymail.co.uk/news/article-1304919/Plight-1-1m-stuck-homes-sell.html
Stagnation until either the buyer or seller gives in. We will see who blinks first!
http://www.telegraph.co.uk/finance/economics/houseprices/5507699/Bank-of-England-says-1.1m-homeowners-in-negative-equity.htmlAs many as 1.1m UK households are in negative equity, according to the Bank of England.
that was over a year ago - house prices have moved on a bit since then... so if you still think that there are 1.1 million people in negative equity then house prices haven't risen and you stick to this forum...
if you think it's less than 1.1 million you're obviously realistic and don't believe anything you read in the Daily Mail...0 -
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.
3 points for displaying a willingness to consider alternatives, & to accept that not everything is a pre-concieved idea which fits in with your point of view!:T
For the purposes of clarity, my assertion is that elements of blame lie with both parties - borrowers were borrowing irresponsibly. Of that I have little doubt. In my line of work, I have been watching a lot of irresponsible borrowing for many years, & have said before that consumer borrowing has long been unsustainable, & it was only a matter of time before it bit someone on the behind.
However, at the same time, financial institutions have not acted wholly responsibly during this time. PPI mis-selling is an obvious one (repeatedly sold to the self employed, or the retired), and lending to people with minimal checking with respect to affordability.
Somewhere in the middle of it all, both bear responsibility.Thrugelmir wrote: »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.
I agree with you in theory. However there is an implied duty of care between the bank & consumer. That said, caveat emptor remains.Graham_Devon wrote: »The banks credit check you.
They are therefore, by default checking you are capable of taking on the loan, and making a decision for us as to whether we can take the loan or not.
An example of "being an adult making your own decisions" would be self certified mortgages, and we've all heard of problems with those I'm sure.
On saying all that, I think there could be some confusion here. I'm not blaming the banks for a person wanting to borrow. Or a person overborrowing (though the banks shouldn't have leant in this case).
What I'm blaming the banks for is the agressive selling tactics and lax control. I will also blame them for inventing ways to get around the system. Especially with mortgages, and allowing a mortgage with a personal loan attached to make it 125%. The banks were speculating, nothing more, nothing less.
So yes, I will blame the banks for stupid lending when they themselves are offering products which even they cannot claw the money back on. I will blame them for making loans attractive and actively trying to push you down the loan route instead of using other means.
I will blame the banks for saying such stuff as "we can't give you anymore unsecured credit, but if you move that credit to a secured loan, we can start all over again on the unsecured loans".
I'm not going to blame the banks for people spending up to their absolute limits then going out to get another card and then doing the same again living well beyond their means.
Credit checking DOES NOT check your ability to repay. More it checks how consistently you have paid debts off in the past. (NB it doesn't look at how, such as on the plastic, just whether you have paid it off). This is done to look at the level of risk you are taking.
Banks do not (but I'd argue should) do a more detailed sit down with a borrower to examiine income/outgoings to better assess ability to repay & suitability of product.
I find it ironic that banks consistently say "past performance is no indication of future performance" then look at HOW YOU HAVE REPAID CREDIT IN THE PAST TO SEE HOW YOU'LL PAY IT IN THE FUTURE!It's getting harder & harder to keep the government in the manner to which they have become accustomed.0 -
do you think banks are not lending to businesses and companies because they're expecting lower house prices too?
That's more to do with allowing for a possible double dip and lower business profits.Do you know anyone who's bereaved? Point them to https://www.AtaLoss.org which does for bereavement support what MSE does for financial services, providing links to support organisations relevant to the circumstances of the loss & the local area. (Link permitted by forum team)
Tyre performance in the wet deteriorates rapidly below about 3mm tread - change yours when they get dangerous, not just when they are nearly illegal (1.6mm).
Oh, and wear your seatbelt. My kids are only alive because they were wearing theirs when somebody else was driving in wet weather with worn tyres.
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lemonjelly wrote: »Credit checking DOES NOT check your ability to repay. More it checks how consistently you have paid debts off in the past. (NB it doesn't look at how, such as on the plastic, just whether you have paid it off). This is done to look at the level of risk you are taking.
Banks do not (but I'd argue should) do a more detailed sit down with a borrower to examiine income/outgoings to better assess ability to repay & suitability of product.
I find it ironic that banks consistently say "past performance is no indication of future performance" then look at HOW YOU HAVE REPAID CREDIT IN THE PAST TO SEE HOW YOU'LL PAY IT IN THE FUTURE!
Ha! Tell me about it.
Ironic personal anecdote highlighting how bizarre the whole system was/is working.
A few years ago my old Dell laptop needed replacing. Dell, at the time, had a "buy now - pay in 12 month" or some such offer going.
Now....I'm old fashioned. Both my OH and I like to own the things we buy. We do use credit cards for both convenience and purchase protection, but we don't utilize them to buy things we couldn't afford otherwise. Before someone here jumps down my throat - yes, I DO know we are very lucky.
Anyhow, the "buy now - pay in 12 month" Dell laptop story. Would I get a discount, I inquired, if I paid it in full immediately? Reply: no. Nothing, not even a fiver off? No. "Ok, then, may I please order one under the "pay in 12 month" promotion ?"
"Certainly" they said "we'll just do a quick credit check on you".
After which they hastily withdrew their offer. Apparently, my credit rating was not good.
Why? Because I had no debt record. None.
Now you tell me how THAT makes any sense at all.
To add insult to injury, a friend also applied for their offer. She promptly had a new laptop sent within 5 days. The difference? They had a 95% mortgage and everything in their house, from the sofas to the washing machine was bought on HP. They didn't merely not have a nickel to rub together they had amassed so much debt it was dizzying. Her credit check, however, was fine.
Mad.0 -
if you think it's less than 1.1 million you're obviously realistic and don't believe anything you read in the Daily Mail...
I take their word on the day and date. That's about it....much enquiry having been made concerning a gentleman, who had quitted a company where Johnson was, and no information being obtained; at last Johnson observed, that 'he did not care to speak ill of any man behind his back, but he believed the gentleman was an attorney'.0
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