100,000 homeowners 'are set to default on their mortgages'

joe_blotts

UKAR, the state-backed lender that took on mortgages from Bradford & Bingley and Northern Rock, has more than 100,000 customers on its books with no credible plan to repay their interest-only home loans.

Some 60 per cent of its 600,000 borrowers have taken out the controversial loans, where customers simply service the interest costs and do not make any capital repayments.

The risk is that people could lose their home if they are unable to repay or rearrange the mortgage at the end of the term.

Many of them are on buy-to-let properties. But two-thirds of those with interest-only mortgages on their main home have only a vague notion of how they will repay the capital, or no idea at all. And 5 per cent do not even realise they have an interest-only deal.

Most of the mortgages will mature towards the end of this decade, leaving customers just eight years to raise the remaining cash


Read more: http://www.dailymail.co.uk/money/mortgageshome/article-2180031/100-000-homeowners-set-default-mortgages.html#ixzz21uqs8j68

Could be some distressed sales deals coming, further depressing prices

Graham_Devon

Or could be some more forebearance and altering of contracts to make sure they keep their homes.

The forebearance issue is most likely, as it's good even for the banks. Recently even Barclays chose simply to ignore those on forebearance and not include them within the arrears figures!

ukcarper

joe_blotts wrote: »

UKAR, the state-backed lender that took on mortgages from Bradford & Bingley and Northern Rock, has more than 100,000 customers on its books with no credible plan to repay their interest-only home loans.

Some 60 per cent of its 600,000 borrowers have taken out the controversial loans, where customers simply service the interest costs and do not make any capital repayments.

The risk is that people could lose their home if they are unable to repay or rearrange the mortgage at the end of the term.

Many of them are on buy-to-let properties. But two-thirds of those with interest-only mortgages on their main home have only a vague notion of how they will repay the capital, or no idea at all. And 5 per cent do not even realise they have an interest-only deal.

Most of the mortgages will mature towards the end of this decade, leaving customers just eight years to raise the remaining cash


Read more: http://www.dailymail.co.uk/money/mortgageshome/article-2180031/100-000-homeowners-set-default-mortgages.html#ixzz21uqs8j68

Could be some distressed sales deals coming, further depressing prices

So they would have bought in the mid 90s when house prices were less than 40% of what they are now.

Graham_Devon

ukcarper wrote: »

So they would have bought in the mid 90s when house prices were less than 40% of what they are now.

And?

Would you be able to rustle up (using this as an example) 65k?

FTBFun

joe_blotts wrote: »

Could be some distressed sales deals coming, further depressing prices

100,000 properties isn't really that much in the grand scheme of things.

Keep clutching at those straws.

robmatic

Graham_Devon wrote: »

And?

Would you be able to rustle up (using this as an example) 65k?

Remortgaging wouldn't be much of a struggle.

ukcarper

Graham_Devon wrote: »

And?

Would you be able to rustle up (using this as an example) 65k?

As has pointed out some people will be able to remortgage, some will probably have made arrangements, if they are BTL some will sell and take profit and some will struggle.

Graham_Devon

Oh OK, I'm converted, it isn't actually an issue at all.

ukcarper

Graham_Devon wrote: »

Oh OK, I'm converted, it isn't actually an issue at all.

I don't think is as big an issue as some people are trying to make out it will certainly be an issue for some people.

michaels

Even worse at the end of the decade millions of people living in rented accommodation will have no housing equity and no savings but somehow those who may well have at least some housing equity are much worse off?

Given rents are unlikely to be lower than IO interest payments and thus those renting are no more likely to have any savings than those on IO, are there any posters on here who given the choice in 2020 of having a small amount of equity in a property they can not remortgage or a rented property and no equity would chose the later?

joe_blotts wrote: »

UKAR, the state-backed lender that took on mortgages from Bradford & Bingley and Northern Rock, has more than 100,000 customers on its books with no credible plan to repay their interest-only home loans.

Some 60 per cent of its 600,000 borrowers have taken out the controversial loans, where customers simply service the interest costs and do not make any capital repayments.

The risk is that people could lose their home if they are unable to repay or rearrange the mortgage at the end of the term.

Many of them are on buy-to-let properties. But two-thirds of those with interest-only mortgages on their main home have only a vague notion of how they will repay the capital, or no idea at all. And 5 per cent do not even realise they have an interest-only deal.

Most of the mortgages will mature towards the end of this decade, leaving customers just eight years to raise the remaining cash


Read more: http://www.dailymail.co.uk/money/mortgageshome/article-2180031/100-000-homeowners-set-default-mortgages.html#ixzz21uqs8j68

Could be some distressed sales deals coming, further depressing prices

PasturesNew

Cheaper than renting...... no 6-12 monthly renewal fees..... and you know if you keep paying you won't be asked to leave.