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Lender forbearance becoming “a sick joke”
Comments
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RenovationMan wrote: »If everyone nudgetted their way through temporary upheavals then we wouldn't need much of a benefit system and so our taxes would be lower and we'd have more each month to put into personal insurance.
Whether those insurance companies would pay out is quite another matter, they certainly seem to have a lot of get out clauses in their policies.
If they do pay out they only pay for a year so what happens after that. If the benefits system was just paying for tempory upheavals I would think the overall bill would be a lot less than it is.0 -
Just wanted to put a couple of responses in from the Building Societies Asociation as they seem fair:In our view Government should consider the individual circumstances of the claimant to ensure that homeownership remains right for them. It could be that for some long term claimants, downsizing or exiting homeownership altogether may be a more appropriate solution to their needs, rather than the continued payment of SMI.
^^ good idea to save taxpayer money IMOGovernment could also consider repaying the outstanding mortgage balance, rather than continue to pay SMI. This may be appropriate in the case of claimants in receipt of Pension Credits, where the remaining mortgage balance is small and therefore repaying this
in full with a lump sum SMI payment, may reduce the overall cost. DWP could consider protecting this payment via a charge on the property, therefore the payment is still recouped at some point, but the costs associated with ongoing payment may well be reduced.
They would like to go further with SMI though, and apply it to not only those who have lost their income, but also those who have seen any reduction in income, for instance, taken a different job and has less income.....or just lost overtime.We also believe it is important to note that claimants are entitled to some assistance from the government and it is important that SMI continues as a state benefit. Recouping the total value of the support from longer term claimants would imply that they were not eligible for state support on a shorter term, as other claimants are. To ensure fairness and
consistency, SMI payments should only be recouped once the claimant becomes a 'longer term' claimant.We would also support a further review as to whether SMI could be expanded to apply to those who may have received a reduction in income rather than a complete loss of income. In the current economic cycle there are a significant proportion of consumers who have seen a cut in overtime payments or have moved from full to part time work in order to stay in employment. In these instances, there is little to no assistance available to these borrowers. This is not necessarily fair as they have remained in employment.0 -
Graham_Devon wrote: »Just wanted to put a couple of responses in from the Building Societies Asociation as they seem fair
Oh, hello GD are you back again?Graham_Devon wrote: »I'm bowing out, as it appears we could just be at arguing for arguments sake point here.
You're in and out of this thread like a fiddlers elbow!Graham_Devon wrote: »I'm out for good on this discussion now anyway. it's clear you are just looking for attention and purposely being extremely obtuse. It's become a plaything for you, rather than a discussion on the scheme.
Or were you just 'out for good' until you'd thought of a new angle and felt ready to get back into the discussion?
Good for you, no one likes a quitter.
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“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Graham_Devon wrote: »Just wanted to put a couple of responses in from the Building Societies Asociation as they seem fair:
^^ good idea to save taxpayer money IMO
They would like to go further with SMI though, and apply it to not only those who have lost their income, but also those who have seen any reduction in income, for instance, taken a different job and has less income.....or just lost overtime.
Is that a sarcastic comment? SMI is paid at 3.6% of the total balance outstanding. Therefore the balance is largely irrelevant (although there is an admin cost to paying any benefit I doubt it is massive with SMI as it is a flat rate benefit paid directly to the bank in bulk). The number of year needed to claim before SMI interest eclipses the capital balance is 1/0.036 = 27 years 9 months. Furthermore that doesn't tell the whole picture as you have to pay the capital now. To finance that the state has to borrow more money and then pay interest on that in effective perpetuity; if we just paid the interest through SMI then each year the amount we have to borrow reduces in real terms due to the effect of inflation.
Paying off the capital of people's mortgages offers terrible value for money (and cashflow impact) for the tax payer.0 -
chewmylegoff wrote: »Is that a sarcastic comment? SMI is paid at 3.6% of the total balance outstanding. Therefore the balance is largely irrelevant (although there is an admin cost to paying any benefit I doubt it is massive with SMI as it is a flat rate benefit paid directly to the bank in bulk). The number of year needed to claim before SMI interest eclipses the capital balance is 1/0.036 = 27 years 9 months. Furthermore that doesn't tell the whole picture as you have to pay the capital now. To finance that the state has to borrow more money and then pay interest on that in effective perpetuity; if we just paid the interest through SMI then each year the amount we have to borrow reduces in real terms due to the effect of inflation.
Paying off the capital of people's mortgages offers terrible value for money (and cashflow impact) for the tax payer.
Totally fair points, and changed my thoughts on it.0 -
Graham_Devon wrote: »Totally fair points, and changed my thoughts on it.
To defend you for a change didn't they say a charge could be put on property and the lump sum be recouped when property was sold.
The only problem I can see is the upfront cost to government.0 -
To defend you for a change didn't they say a charge could be put on property and the lump sum be recouped when property was sold.
The only problem I can see is the upfront cost to government.
Why not just pay the interest and use a charge on the property to recover that when it is sold?0 -
chewmylegoff wrote: »Why not just pay the interest and use a charge on the property to recover that when it is sold?
I suppose the government would save because they could borrow the money at lower rates but I agree it seems to be the simplest solution.
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