Nearly one million face mortgage difficulty.

lisyloo

I get your point thrugelmir..
Generally many of us are fed up with spam/cold caliing/junk mail, but I was also annoyed because they could have looked at our ISAs and offset savings and seen that we weren't a risk.
They didn't ask me a straight question, they left messages and it wasn't clear to me whether it was cold calling, survey or something important.
If they'd given me some indication of the nature of the call I would have been more inclined to co-operate.

They could send a letter which makes it clear that the debt needs to be repaid and that would be less intrusive that leaving cryptic message that people might be inclined to ignore.

wotsthat

Crashy_Time wrote: »

Did you plan for the emergency interest rates, or did you just get lucky?

Didn't plan for them but reacted accordingly. Some people like to look a gift horse in the mouth - not me.

I suppose you might call that lucky - it's my middle name.

danothy

wotsthat wrote: »

Didn't plan for them but reacted accordingly. Some people like to look a gift horse in the mouth - not me.

I suppose you might call that lucky - it's my middle name.

What kind of daft middle name is "gift horse"?

Graham_Devon

In the BBC article today, it suggests that at the end of 2014, 16,000 IO mortgages had matured, but the repayment had not been paid.

It states also that in "many cases" homeowners would be in the process of making a lump sum payment.

Can anyone shed anymore light on this? What's happening to these loans that have matured? How long can the "process" of paying the lump sum off actually take? It's been 9 months....

In other words, how many banks are sitting on matured IO loans still awaiting the lump sum payment - and in those cases, what is actually happening to the buyer?

However, at the end of the year, a total of 16,000 loans had matured but not been repaid. The CML said that in many cases homeowners would be in the process of paying the lump sum, so not all would be in difficulty.

michaels

Was that the same article that said the number of outstanding IO mortgages had fallen by 16% (460,000) in one year? Of which a whole 16k were yet to be redeemed. Even in worse case that sounds manageable....

Thrugelmir

lisyloo wrote: »

They could send a letter which makes it clear that the debt needs to be repaid and that would be less intrusive that leaving cryptic message that people might be inclined to ignore.

Everybody has been written to at least once by now (some time ago) if not more often. As the numbers reduce it's like the tide going out. Who is swimming with no trunks on?

Graham_Devon

michaels wrote: »

Was that the same article that said the number of outstanding IO mortgages had fallen by 16% (460,000) in one year? Of which a whole 16k were yet to be redeemed. Even in worse case that sounds manageable....

Yes. Down 460,000, but a lot have been put onto other mortgages sometimes with extensions and sometimes just switching. I wasn't trying to make a case that it was "bad", so don't really get the "everything is ok" while ignoring the point of my post response.

It doesn't answer what's actually happening to those 16,000 that have matured?

I presume they are just rolling on, with the buyer paying interest on the original amount?

What it did highlight to me is if these loans have matured, they have got to be 20-25 years old. So the buyer will have bought at early 90's prices. Yet still 16,000 haven't repaid but seemingly haven't undergone reposession?

lisyloo

Why must they be 20-25 years and relate to an old purchase.
I took my I/O mortgage in 2008 for 10 years and it related to a purchase in2003.
Obviously thats's only one anecdote but just wondering why you think mortgages MUST be a certain length.

wotsthat

Graham_Devon wrote: »

Can anyone shed anymore light on this? What's happening to these loans that have matured? How long can the "process" of paying the lump sum off actually take? It's been 9 months....

The BBC are referring to the release from the CML - the link was provided in this thread and even quoted the part of the press release that covered this.

As at the end of 2014, CML members reported that there were around 1.9 million pure interest-only mortgages outstanding, and around 460,000 part interest-only mortgages. This was around 300,000 fewer pure interest-only mortgages and 160,000 part interest-only mortgages than a year earlier.

A quarter of this reduction is down to natural attrition (loans maturing and repaying at the end of their term). Around a third can be attributed to full redemption of loans not set to mature until at least 2028 - suggesting that many borrowers are taking action well before problems could arise. This also suggests that a significant group of borrowers are successfully remortgaging onto full repayment terms without falling foul of new affordability rules.

Of those loans that have matured, few have failed to repay. In total, there are fewer than 16,000 loans outstanding which have matured but not yet repaid or restructured - and previous experience shows that most such loans subsequently redeem within a relatively few months of maturity.

20% of all IO were redeemed in a single year - I find that an amazingly high number but we're meant to worry about the 0.7% that came up for repayment and haven't yet been redeemed?

It's an insignificant number.

If anyone is still hearing a ticking noise they might need to get their ears checked out.

gadgetmind

lisyloo wrote: »

Obviously thats's only one anecdote but just wondering why you think mortgages MUST be a certain length.

Let's throw in another. We took out our IO mortgage this year and it's for 13 years.