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People in thier 60's being forced to sell homes.
Comments
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shortchanged wrote: »
"Did you take out an IO mortgage and not realise that you were supposed to pay the capital back? Are you now stuck with hundreds of thousands of pounds of debt?
She (the old lady) would answer 'No, I'm stuck with hundreds of thousands of pounds of equity'Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop0 -
chucknorris wrote: »She (the old lady) would answer 'No, I'm stuck with hundreds of thousands of pounds of equity'
Simple answer then. Sell up and downsize.0 -
When you see lenders applying TCF to those with massive arrears, negative equity and no job, delaying repossession, Working with their customers etc and then you compare it to someone who has no bad debt, who has regularly kept to commitments, and you say they should be forced out, when they could easily afford to stay put wiht an extension to their term.
Unlike the other people you quote it seems her term has ended as she simply now does not want to pay the debt back. There is little evidence she has paid any of it off and is even presenting a plan to pay it off.
If you took out a mortgage and then lost your job then there would be and should sympathy same as if an investment failed and at the end of term you found yourself a bit short.
It seems here though she simply took out a io mortgage over 15 years without any means or interest in paying back the mortgage. If she was given bad advice then fair enough but if she advised the lender she would have the funds to pay it off or would downsize at terms I can't see the issue.
A court would be setting a precidant which would probably go to the court of appeal if they left her in the house on the basis she was covering the IO payment as repayment mortgages would therefore not be worth the paper they were written on and all lenders would have to base lending on life time mortgages.0 -
Other than the original post which specified the planned repayment method:There is little evidence she has paid any of it off and is even presenting a plan to pay it off.
That's a repayment plan that is entirely acceptable to the FSA for people in her position, complete with being described as an acceptable repayment method in their review of the mortgage market, for those of her sort of age.She is perfectly able to continued on, just as people always did, until death at which time debt could easily be settled.
It's not a method that might be acceptable at younger ages but that's not the situation of this particular borrower.
There should be no issue. It's long been standard practice to have an existing interest only mortgage run until death in such circumstances. Even in a repayment case the remaining balance might be treated the same way if the customer was sufficiently old for it to be a credible repayment method.if she advised the lender she would have the funds to pay it off or would downsize at terms I can't see the issue.
What we're seeing and what Conrad is unhappy about is a substantial change in practice that is disadvantaging people who are in a poor position to deal with such changes because they are no longer working. It's the sort of thing that TCF and transitional arrangements for existing loans should be covering.0 -
Other than the original post which specified the planned repayment method:
That's a repayment plan that is entirely acceptable to the FSA for people in her position, complete with being described as an acceptable repayment method in their review of the mortgage market, for those of her sort of age.
It's not a method that might be acceptable at younger ages but that's not the situation of this particular borrower.
There should be no issue. It's long been standard practice to have an existing interest only mortgage run until death in such circumstances. Even in a repayment case the remaining balance might be treated the same way if the customer was sufficiently old for it to be a credible repayment method.
What we're seeing and what Conrad is unhappy about is a substantial change in practice that is disadvantaging people who are in a poor position to deal with such changes because they are no longer working. It's the sort of thing that TCF and transitional arrangements for existing loans should be covering.
If the term of the mortgage is till death then lender would not be trying to end it now. I suspect what Conrad is saying is there was an assumption that lenders would turn a blind eye and would not worry about it.
Where are life time mortgages you talk about I have only ever taken out 1 IO mortgage and funnily enough that was about 15 years ago and with Abbey and a repayment was needed.
I'm not sure what Conard is trying to get at as he seems to blaming the FSA for the problems but you have shown that a lifetime mortgage is an acceptable repayment tool so in reality his problem should be with the lender not the FSA0 -
A party does not have a unilateral right to terminate the contract if they can't get the other party to agree to a change in terms.
A mortgage contract has a specified end date. It runs for a fixed term. At the end of which the borrower has agreed to have repaid the monies advanced.
So its not a question of new terms. But a new contract. Of which there's no certainty that the parties will come to an agreement. There is nothing in English law which forces a bank to lend money.0 -
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shortchanged wrote: »Simple answer then. Sell up and downsize.
Absolutely, but reading between the lines I think she is motivated by family and friends rather than money. Plus she seems to not be exploring her options (probably simply resistance to change), it can’t be that difficult to downsize and remain in the same locality. Santander are probably in reality doing her a favour.Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop0 -
"like everyone else's? so how did I get a 25yr Mortgage at 55? (and ive still got it)RenovationMan wrote: »Oh your poor hurt feelings Graham. I guess you like to dish out insults but not take them?
I'll try again for the millionth time to explain what they have changed their minds on. If you dont get it this time then you're clearly an idiot or just trolling. Fair enough?
This old lady is not just retiring, she retired 10 years ago. Her mortgage product, like everyone else's would have had an end date of before or on her retirement date (my own mortgage term was reduced from the standard 25 years because I hit retirement age before then).
When the little old lady's original mortgage hit term, the bank will have said "OK, your mortgage is up, can we have our money back please". The little old lady will have then said "I can't pay off £100odd thousand because my endowment had a shortfall (or whatever), what can I do?" The bank will then have said "We will set up a new mortgage product where you continue to pay the mortgage on an IO basis".
They must have done this in order for the little old lady to be in her 70s and still have an IO mortgage.
Now they turn around and say "We've had a CHANGE OF MIND and would like our money back please".
So let's recap for you.
1. The bank extended the lady's mortgage past the normal mortgage term and into her retirement years.
2. The bank knew that the lady had no repayment vehicle, because if she had then they would not have had to do step 1.
3. The bank COULD have insisted that a portion of the extended mortgage was repayment so they could reduce the debt and reduce their risk. They clearly didn't.
4. Years later, the bank changes the arrangement and now asks for their money back.
Do you understand now?0 -
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