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

Generali

FTBFun wrote: »

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

Keep clutching at those straws.

It's about 2 months house sales which is quite a lot of extra supply.

ukcarper

Thrugelmir wrote: »

Many advances were the infamous 125% loans which allowed unsecured debt to be consolidated and deferred onto the never never......

HPI isn't going to be helpful given that many of these borrowers will be looking to sell.

As I said earlier house prices in the mid 90s were less than 40% of what they are now so if they did have a 125% mortgage they would still have 50% equity.

asturdy2

ukcarper wrote: »

As I said earlier house prices in the mid 90s were less than 40% of what they are now so if they did have a 125% mortgage they would still have 50% equity.

maybe they were remortages with only 10 to 15 years left ? lots of people were living the high life mewing there homes to death.

ukcarper

asturdy2 wrote: »

maybe they were remortages with only 10 to 15 years left ? lots of people were living the high life mewing there homes to death.

I'm sure some of them will have mewed and some of them would have increased the term. But if people are expecting 100,000 people being forced to sell thier property when thier terms end i think they will be mistaken.

MacMickster

If it was only the one lender, so only 100,000 AND those were all people likely to be able to remortgage at the end of their term then there would not be too significant a problem.

Sadly, across all lenders, the figure will be much higher, and a significant proportion would have taken out interest only mortgages as that was all that they could afford. These will be the same people who are least likely to be able to remortgage in the current climate.

Thrugelmir

ukcarper wrote: »

Are you saying they all had 15 year mortgages.

No. The lending peak of both B&B and NR was a decade later.

NR was still a building society until 1997, Bradford & Bingley even later until 2000. The boom and bust happened in a very short period of time.

The credit lending boom (£600 billion) was between 2003-2007. This is where the root cause of the problems lie. In the amount that people paid for their property.

Thrugelmir

RenovationMan wrote: »

I have an interest only mortgage for £250k with no recognisable repayment vehicle. It was a £300k mortgage 2 years ago, also with no recognisable repayment vehicle.

You are repaying the capital though. Many NRAM customers aren't. As were planning on using HPI to settle the debt. This includes BTL borrowers with B&B.

robmatic

Thrugelmir wrote: »

No. The lending peak of both B&B and NR was a decade later.

NR was still a building society until 1997, Bradford & Bingley even later until 2000. The boom and bust happened in a very short period of time.

The credit lending boom (£600 billion) was between 2003-2007. This is where the root cause of the problems lie. In the amount that people paid for their property.

So there is still another 15 years before these problem mortgages mature then?

Thrugelmir

robmatic wrote: »

So there is still another 15 years before these problem mortgages mature then?

Depends both on the mortgage term and whether people are able to service their mortgages.

Around 10% of NRAM's customers are considered to be in financial difficulty already.

michaels

IN the mean time the govt is borrowing the money at 1% and lending it out at 5-6% which will pay for a lot of defaults...

Thrugelmir wrote: »

Depends both on the mortgage term and whether people are able to service their mortgages.

Around 10% of NRAM's customers are considered to be in financial difficulty already.