800,000 "zombie households" only survive due to low rates

Graham_Devon

The first article says one thing and is part of the mail.

The second article says another and is from the financial times.

I know which I'd rather go with, but it's up to you which you'd prefer to choose, and I understand why you wish to choose it

macaque_2

As Graham points out: "8% of mortgages are in forbearance"

I can see the logic behind forbearance but it carries severe risks. At the moment, most defaulters probably fall into the 'can't pay' category. The biggest incentive to pay a mortgage when you are in negative equity however is that you might lose your home. The signal that forebearance sends out is that you can stop paying and keep your house. The lenders now run the risk of floods of 'won't pay' debts on their books (after all, its cheaper than renting or buying).

chucky

macaque wrote: »

As Graham points out: "8% of mortgages are in forbearance"

I can see the logic behind forbearance but it carries severe risks. At the moment, most defaulters probably fall into the 'can't pay' category. The biggest incentive to pay a mortgage when you are in negative equity however is that you might lose your home. The signal that forebearance sends out is that you can stop paying and keep your house. The lenders now run the risk of floods of 'won't pay' debts on their books (after all, its cheaper than renting or buying).

btw macaque, what happened to the 70% club. I've been paying my membership but I'm not getting any threads updating how we're doing. Do I have to email the club chairman to complain about your lack of updates?

Graham_Devon

Yer, just to clear it up, heres what the FSA stated about those with interest only mortgages in forebearance...Safe to say, therefore, spread accross all mortgages, 800,000 are IN forebearance currently.

Hamish will slam the mail at any other point, but in this case, he's seen a misrepresentatio he rather likes.

The Financial Services Authority estimates that between 5 per cent and 8 per cent of mortgages are in forbearance, The Times reported.
This would suggest up to 314,000 people on interest-only mortgages are struggling to keep up with their repayments.

chucky

Graham_Devon wrote: »

Yer, just to clear it up, heres what the FSA stated about those with interest only mortgages in forebearance...Safe to say, therefore, spread accross all mortgages, 800,000 are IN forebearance currently.

Hamish will slam the mail at any other point, but in this case, he's seen a misrepresentatio he rather likes.

So is this 800,000 repayment plus 314,000 interest only, 800,000 total mortgages or is it just 314,000 interest only mortgages that are in arrears?

Graham_Devon

Read the article, it's clear as mud. 800,000 total.

chucky

Graham_Devon wrote: »

Read the article, it's clear as mud. 800,000 total.

Maybe to you it is but I'm more intelligent that you and don't believe everything I read.

35.2% of 11 million mortgages are Interest-Only Deals
Up to 8 per cent of these are ‘in forbearance’, says FSA

Up to 320,000 homeowners with Interest-Only mortgages are at risk of losing their property Because they are struggling to pay.

http://m.dailymail.co.uk/news/article-2127667/Interest-mortgage-timebomb-hundreds-thousands-struggle-pay-debts.html

So is it still clear as mud for you... hope not.

Graham_Devon

Give it up chucky, this constant barrage of abuse and twisting is just completely unnecesary.

chucky

Graham_Devon wrote: »

Give it up chucky, this constant barrage of abuse and twisting is just completely unnecesary.

The article clearly says it's 8% of interest only mortgages not 8% of all mortgages. Avoid the facts by all means but you look the complete idiot for a change. It's 314,000 mortgages not 800,000 mortgages!!

You're asked a simple question and you think you're being abused. Read the article, answer the question and stop acting like a 6 year old little girl just because you've been found to be wrong.

I don't expect you to come back to me saying I'm right, you'll either ignore it or try and squirm your way out of it.

grizzly1911

A news article on BBCR4 suggested Zombies referred to those in deep debt who couldn't "get out of it" any time soon rather than those who had "lost" wealth.

800 000 in arrears of some sort is a lot a probably not short of the mark. The statistics vary wildly across the country with the Se being the worst and NW/NE being worst at 6-7%+.

I guess LTV , negative equity, saleability come into the equation up here/there meaning the debt can't easily be repackaged into something that could be considered to be performing by the lenders. SE benefits from continued HPI and a more fluid market.