MSE News: Home repossessions fall, but future less rosy

Former_MSE_Helen

"The number of home repossessions has fallen to its lowest level in a year and-a-half despite the toughening economy ..."

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Home repossessions fall, but future less rosy

oldvicar

There were 28,300 mortgages with arrears of more than 10% of the balance between April and June, an increase from 28,000 during the previous quarter.
By the end of June, the number of loans with arrears of 2.5% or more of the outstanding balance stood at 157,400

Arrears of 10% of the balance. That must be 2 years worth of paymants in many cases. That's an awful lot of forebearance.

Dave_Ham

In my humble opinion, the banks are not very good at determining the genuine cases from the non-genuine cases and tar them all with the same brush..

Additionally, they do not want to offer help unless the client is already in arrears and then it is too late. Once the client is in arrears their credit rating is already being destroyed and they know that they are unlikely to be repossessed if they can offer some form of credible plan and therefore what appetite to they have to get clear of the arrears...

When income and expenditure forms are submitted, they should be looked over by someone sensible and then the client can be offered an appropriate solution if indeed appropriate.

No amount of government love and affection can replace common sense from the lenders...

On a side, that is not me saying be more lenient rather assess each case properly on its merit and take action. And not always when there are arrears, as a client may have been supplementing the mortgage payments via cash advances, credit card cash advances, payday loans etc. and storing up a bigger problem 6 months down the road as the lender would not get involved earlier and bombarded with chase calls...

Pincher

I suspect millions of people will cope perfectly well if they were paying 2.99%.

So, instead of lending to banks at 1%, who then lends it at 5% to poor people, and making obscene profit, what if the government guarantees the mortgage, so the borrower repays at 3%? The government only has to pay out the difference in the event of a default, as the property will be auctioned off.

This will prevent a lot of border line cases, who would have been repossessed, and claiming Housing Benefit.

henrik1971

Pincher wrote: »

I suspect millions of people will cope perfectly well if they were paying 2.99%.
.

Couldn't agree more. The whole business is mad. A few years ago, the margins were like 1 or 2% maximum, why they are double the size now? The banks are already recapitalised, and why these additonal 'sting' product fees are dropped in the mix at crazy amounts like 999, 1499, and even 1999 is beyond me.

Even more mad is the larger deposit requirement. When property values were frothing at their maximum upper limit and liable to fall at any moment, lenders were happy with tiny deposits, despite the high risk of any equity instantly being wiped out by the smallest fall in prices.
Now that prices are flat and will continue to be so for some time to come (before hopefully rising again at some point in the future), lenders are wanting bigger deposits, even though the risk of prices falling much further is relatively low.

Banks perform badly and lose millions - the directors all get massive bonuses.

Everything is the reverse of what you think it should be.