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UK Subprime
macaque_2
Posts: 2,439 Forumite
We hear much about the cruelty of repossession. If there was a shred of sincerity behind this debate we would hear more discussion about private renters, many of whom who lose their homes every time BTLs flip a property. Many in this group would like to buy but of necessity have become a tougher and more stoical breed.
Buyers who were genuinely duped into taking on debt for overpriced assets deserve sympathy, as do those with simpleton parents (who pushed them into buying). For the rest there can be no sympathy. Their actions were driven by greed and the dice landing badly.
So why are lenders so sensitive about bad debt? This has nothing to do with social conscience. It is all about sweeping UK subprime lending under the carpet. And it would seem to be bigger than many want to let on. And this is at ½% base rates!
So what should renters do? The answer is wait!
Buyers who were genuinely duped into taking on debt for overpriced assets deserve sympathy, as do those with simpleton parents (who pushed them into buying). For the rest there can be no sympathy. Their actions were driven by greed and the dice landing badly.
So why are lenders so sensitive about bad debt? This has nothing to do with social conscience. It is all about sweeping UK subprime lending under the carpet. And it would seem to be bigger than many want to let on. And this is at ½% base rates!
Mortgage borrowing costs are likely to rise next year, the Bank of England has warned, whilst revealing that between 5% and 8% more households than known about are in trouble with their mortgages – but lenders are showing them forbearance and so their woes are not showing up on official figures. http://www.estateagenttoday.co.uk/news_features/More-households-than-thought-are-in-trouble-with-mortgages
So what should renters do? The answer is wait!
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Comments
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Shared ownership/equity, 95%+ mortgages and self cert mortgages are our sub prime.:exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.
Save our Savers
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Shared ownership/equity, 5%+ mortgages and self cert mortgages are our sub prime.
To me 'sub-prime' means lending to people who cannot, or were never able to, repay the money they were lent. Basically, lending money to people who shouldn't have been lent it. So you can't say 5% mortgages are sub-prime.0 -
To me 'sub-prime' means lending to people who cannot, or were never able to, repay the money they were lent. Basically, lending money to people who shouldn't have been lent it. So you can't say 5% mortgages are sub-prime.
this is true. To my mind the Govt's latest scheme to get first timers to buy new properties is state sponsored sub prime.....0 -
Genuine Sub-prime is lending to people with exceptionally bad credit, such as the newly bankrupt or with serious current defaults, or the like of the American NINJA loans, (No Income No Job No Assets). Worse still, it was often at teaser rates of 1%, that automatically reverted to 5% plus after 2 years and this was often not explained to the recipients of the lending. The vast majority of these people have since defaulted.
As much as 30% of US lending in the last few years before the crash was to people in this category, hence the millions of repossessions in the States.
Of course such lending in the UK was so rare as to be virtually non-existent. Hence this article talks about the true arrears rate being 1.7% of mortgages, not 1.2%. Either way, a vanishingly small percentage, given the financial crisis, recession and massive increase in unemployment.
The truth is there was almost zero sub-prime lending in the UK.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
To me 'sub-prime' means lending to people who cannot, or were never able to, repay the money they were lent. Basically, lending money to people who shouldn't have been lent it. So you can't say 5% mortgages are sub-prime.
Typo should of been 95%+ mortgages.
I call subprime schemes designed for people who can't afford to buy normally at current inflated levels to buy.
For example with sub prime, alt a/option arm mortgages every thing is ok at the beginning but the costs go up and people struggle. The same is true for shared equity when the loan is repayable, shared ownership with the speed the rent and service charges increase etc.:exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.
Save our Savers
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I call subprime schemes designed for people who can't afford to buy normally at current inflated levels to buy.
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But that's your own bizarre mentalist version of sub prime that really only exists in your head.
Sub prime, as the rest of the world knows it, is as per my previous post.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
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