People in thier 60's being forced to sell homes.

Neverland

Pennywise wrote: »

I think it's gross stupidity to take on an IO mortgage without a repayment plan. Even more stupid/negligent are the advisers who facilitated such a mortgage in the first place.

Looking back at the last decade it was more stupidity and GREED

RenovationMan

Emy1501 wrote: »

Something like 50% of those on SMi are over 50. The bank for what ever reason have decided that for what ever reason that this lady is a risk that they no longer wish to entertain. If her term is up then they are entitled to their money back.

If they went for repossession and were refused that it would make credit even harder to come by because all lenders would have factor in that they were lending not over a term put to death.

Of course if she was to live in the house for another say 20 years and kept up with the repayments then it would be win win for the lender. I suspect though that the bracket she is in does not have a good track record of paying up when you look at SMI and therefore it does not make sense to lender to continue lending.

So we now have her on SMI? While we are making stuff up, why not have as a Nazi sympathisor in the war, perhaps she also has children walled up in her cellar?

Anything in order to demonise people and allow the crashers to get on their soapboxes about the national debt and other economic issues that the little old ladies had no hand in.

RenovationMan

shortchanged wrote: »

So under your grand plan Renoman, the banks would own all of the mortgaged properties in the UK for ever and ever. Is that right?

So basically the banks become nothing more than giant landlords for all of the UK mortgaged properties.

What grand plan? We are talking about one little old lady, not the future of Western civilision. No wonder people are leaving this part of the forum in droves. You're all bonkers.

Emy1501

RenovationMan wrote: »

So we now have her on SMI? While we are making stuff up, why not have as a Nazi sympathisor in the war, perhaps she also has children walled up in her cellar?

Anything in order to demonise people and allow the crashers to get on their soapboxes about the national debt and other economic issues that the little old ladies had no hand in.

Who said she is on SMI?

Her age group represents a higher risk and a risk most lenders no longer wish to entertain. Whether sh may or may not be able to pay in the future is not really relevant.

shortchanged_2

RenovationMan wrote: »

So we now have her on SMI? While we are making stuff up, why not have as a Nazi sympathisor in the war, perhaps she also has children walled up in her cellar?

Anything in order to demonise people and allow the crashers to get on their soapboxes about the national debt and other economic issues that the little old ladies had no hand in.

:rotfl:

Look Renoman or should we call you IOmortgageadvocateMan.

You constantly argue the case for IO mortgages and we are well aware of how greatly you are doing with yours.
Fundamentally there is nothing wrong with IO mortgages IF they are used appropriately which you seem to be doing according to you.

However you are now coming out and defending someone who has an IO mortgage for the wrong reasons and you are trying to justify it. Why can't you understand that IO mortgages need to be paid off at the end of their term in line with the contractual agreement.

And you wonder why sometimes some people are very anti IO mortgage. It's because they have been severly abused over the previous decade.

shortchanged_2

RenovationMan wrote: »

What grand plan? We are talking about one little old lady, not the future of Western civilision. No wonder people are leaving this part of the forum in droves. You're all bonkers.

Well that is basically what you are advocating, that people on IO mortgages don't pay the capital back while they are alive. That is what is bonkers.

Jimmy_31

RenovationMan wrote: »

What grand plan? We are talking about one little old lady, not the future of Western civilision. No wonder people are leaving this part of the forum in droves. You're all bonkers.

Coming from you, that is quite the insult.

RenovationMan

Emy1501 wrote: »

Who said she is on SMI?

Her age group represents a higher risk and a risk most lenders no longer wish to entertain. Whether sh may or may not be able to pay in the future is not really relevant.

OK, I'm willing to chat about this but can we please, for the love of God talk about this one little old lady's issue and not bring in all the other soapbox subjects of HPI, liar loans, bankers bonuses, the cost of oil, gold, benefit fraud, people's desperation to own houses, etc. etc. that this lady patently has not had a hand in.

I mean, can we for once have a discussion without all the vitriol and hatred?

*sigh* here we go then... a leap of faith...

My viewpoint on this particular issue is that the lady seems to have a high level of equity. for one reason or another, a portion of the mortgage has not been paid off her mortgage balance (this could be because of a failing endowment, divorce, etc.). Whatever the reason she has clearly taken her mortgage into her retirement years so the bank must have agreed to this and must have checked her pension income to ensure that she could afford it. We can also assume that as the lady is over 10 years into retirement that her pension covered the mortgage interest during periods of 'normal' interest rates.

We can also assume that the bank has more risky customers, for example people who have lied about their income and bought houses that are way out of their means, people who are sevarl months in default and are not paying their mortgages at all and people who are in substantial negative equity.

Given this I'd say that the bank would be better off hassling the people above who have been reckless than an old lady who is paying all her bills on time and represents a good risk. The bank will receive many many times in interest payments the amount they originally loaned to the lady and they will have the balance of the debt paid off when she finally dies.

Contrast this to someone who lied about their income and bought a house they could never afford (I'm talking about even the interest payments), who fall behind in their mortgage payments and who are in negative equity where if they go bankrupt the bank has absolutely no chance of ever getting their money back.

Which case should the bank be pursuing, the one where they stand to lose a fortune or the one where they stand to make a safe profit?

shortchanged_2

RenovationMan wrote: »

.

My viewpoint on this particular issue is that the lady seems to have a high level of equity. for one reason or another, a portion of the mortgage has not been paid off her mortgage balance

So why shouldn't she be forced to sell and downsize which is what I'm sure would have been explained to her on the taking out of an IO mortgage?

RenovationMan

shortchanged wrote: »

Well that is basically what you are advocating, that people on IO mortgages don't pay the capital back while they are alive. That is what is bonkers.

No, what I'm saying is that this thread is about a little old lady who has a financial issue that is very easy to solve. The bank can simply allow her to go on being a good customer and pay her mortgage on time. When she dies the bank will be first in line to get their money back when the house is sold. This lady represents minimal risk to the bank.

As far as a bank is concerned, good customer is not one who borrows money and pays it back early. It's one who pays interest forever and doesn't pay off the balance. This is why credit cards are a goldmine for lenders.