Banks driving up prices of repossessed properties

tyllwyd

DervProf wrote: »

...
Banks being bailed out by the taxpayer, not allowing a few of those taxpayers to possibly buy repo'd property at a discount = good ?
...

But if a bank sells the repo'd property at less than the outstanding mortgage, I thought that they will pursue the original owner for the difference if they can (which might be years down the line). So allowing one taxpayer to buy property at a discount might be extremely bad news for that other taxpayer. The bank bailout is completely irrelevant.

MegaMiniMouse

I don't really understand what people are trying to say on this thread...

My understanding is this:-

in the years running up to the crash, banks were the biggest influence on the runaway increase in property prices - people would pay whatever the banks would lend, and the banks lent more and more and more because more lending meant more profit

after the crash, the banks simply shut up shop and moved out of the mortgage market because they had milked it dry

the property auction market began to thrive because the sellers were desperate to sell, and the buyers didn't need to find a mortgage

the banks have waited until they can dominate the newly-thriving auction market (by becoming the biggest sellers in that marketplace, due to the unprecedented number of repossessions)

and once they have consolidated their domination, they will once again be in complete control of the UK housing market

its good, innit

MMM

SingleSue

As someone repossessed in the 90's, all I can say is a blooming good job if they are trying their hardest to get the best price as the lower the price obtained, the more the repossessed party have to pay.

Our house was actively sold by the Halifax and they obtained a price which was inline with a normal house sale rather than one which was way below...in the process, saving us approx £10k of debt.

DervProf

tyllwyd wrote: »

But if a bank sells the repo'd property at less than the outstanding mortgage, I thought that they will pursue the original owner for the difference if they can (which might be years down the line). So allowing one taxpayer to buy property at a discount might be extremely bad news for that other taxpayer. The bank bailout is completely irrelevant.

The original owner should be persued for as much of the difference as they can pay.

The bank bailout is not completely irrelevant. Why did Northern Rock, RNBS, Halifax, Bradford and Bingley need bailing out ? (Clue : Not because the Americans are wot dunnit).

DervProf

SingleSue wrote: »

As someone repossessed in the 90's, all I can say is a blooming good job if they are trying their hardest to get the best price as the lower the price obtained, the more the repossessed party have to pay.

Our house was actively sold by the Halifax and they obtained a price which was inline with a normal house sale rather than one which was way below...in the process, saving us approx £10k of debt.

If you'd have managed to hang onto the property, that would have helped maintain property prices (due to the bank not selling it on at a reduced price).

As you lost the property (maybe due to taking on too much debt, maybe through loss of income, maybe some other reason) and the bank managed to sell it at market value, house prices are maintained, thus exposing the next buyer to the same sort of financial risk that you possibly undertook.

And let's not forget, if the bank sold the property at a higher price, they, or their competitor probably had to lend more for it's purchase, thus exposing themselves or their customer to a higher financial risk.

Overall, if banks manage to maintain/increase property prices, they have more bubbly at the shareholder's meeting. I thought that sort of thing was becoming rather unpopular these days.

Linton

DervProf wrote: »

The original owner should be persued for as much of the difference as they can pay.

The bank bailout is not completely irrelevant. Why did Northern Rock, RNBS, Halifax, Bradford and Bingley need bailing out ? (Clue : Not because the Americans are wot dunnit).

None of them failed because of a high default rate from UK residential borrowers.

Northern Rock failed because the way it did business made it completely dependent on short term loans from the international money market. These dried up more or less overnight because of the knock-on effect of the US failures.

I believe Halifax's main problem was commercial lending, not mortgages. They lent enormous amounts of money to fund city centre and out of town shopping/office developments. When the economy began to falter the commercial developments became far less valuable than previously thought.

I am less clear about B&B and RBS. RBS was (and still is) a massive global bank with only limited relative exposure to UK mortgages.

SingleSue

DervProf wrote: »

If you'd have managed to hang onto the property, that would have helped maintain property prices (due to the bank not selling it on at a reduced price).

As you lost the property (maybe due to taking on too much debt, maybe through loss of income, maybe some other reason) and the bank managed to sell it at market value, house prices are maintained, thus exposing the next buyer to the same sort of financial risk that you possibly undertook.

And let's not forget, if the bank sold the property at a higher price, they, or their competitor probably had to lend more for it's purchase, thus exposing themselves or their customer to a higher financial risk.

Overall, if banks manage to maintain/increase property prices, they have more bubbly at the shareholder's meeting. I thought that sort of thing was becoming rather unpopular these days.

It was at the market value of the time......which just happened to be pretty poo and a hell of a lot less than we paid for it in the first place. We ended up with a bill in excess of 30k which could quite as easily have been 40k or more if it had been sold under market value which most repo's tended to be at the time.

We were not one of those who purchased by pushing things to the limit and taking on more than we could handle....it was a combination of circumstances which could not have been foreseen.

Mary_Hartnell

So it was you who removed the carpets, left every tap in the place dripping and the boiler full of soot!!
Seriously though Sue, presumably your place was somewhere near Felix's toe?
Mine was in the Midlands.

Sorry to hear about you and your family's continuing misfortune.

http://en.wikipedia.org/wiki/Ehlers%E2%80%93Danlos_syndrome

Mary.

SingleSue

Lol...not us, all carpets remained in situ and we even gave it a blooming good clean before they changed the locks.
You guessed correctly for the location.

And thanks re the EDS...we are still learning what it all means and the other two boys are going to have to undergo tests as well as they are also displaying symptoms (both have hips which have started to dislocate - something eldest does all the time now)

doire_2

HAMISH_MCTAVISH wrote: »

http://www.ft.com/cms/s/0/057b6080-4126-11e0-bf62-00144feabdc0.html#ixzz1F5Sk0yCS

Perfectly right to do so.

Banks have a duty to minimise losses for themselves, the taxpayer, and the mortgagee, by maximising sales prices.

Good to see they're moving away from auctions and ensuring houses aren't sold at much of a discount, but instead through the normal EA sales channels.

Just look at those that thanked this post. Quite a weird bunch of followers you have there hamish