Government looks to sell HTB loan book

Graham_Devon

Jon_B wrote: »

Hmmm. One would have thought a viewpoint from a homeowner currently utilising a HTB loan might have been a worthwhile contribution compared to the musings of a poster with a track record of having a stated agenda against HTB?

Apologies - would you rather I replied stating I was massively worried about this?

Not really.

Just can't get my head around how this would be the fault (their problem, in your words) of the people who took out a HTB loan, and a result of "their actions" if they are to find themselves stuck unable to re-mortgage, or finding their terms have changed due to the government doing what they said they wouldn't do and selling the loan book on.

As I said, glad you are OK, but a bit confused over your thought process here. Which of the buyers "actions" put them remotely at "fault" here should they find terms change mid term?

Mistermeaner

What terms are changing ?

Graham_Devon

Mistermeaner wrote: »

What terms are changing ?

Tell me which won't change for certain...otherwise "what terms are changing" when we have no detail is a pretty silly question.

One term that has changed is that the government would not look to sell the loans.

Only ever said "should terms change". Not that they definitely will. But it's a risk, no matter how much people poo poo it.

mayonnaise

Graham_Devon wrote: »

some are now stuck on the original mortgage with no where to re-mortgage and only 10 lenders willing to offer a re-mortgage package on a HTB loan.

If 10 lenders (including Halifax and Barclays) are willing to offer re-mortgage packages, how come some are stuck on the original mortgage?

Graham_Devon

mayonnaise wrote: »

If 10 lenders (including Halifax and Barclays) are willing to offer re-mortgage packages, how come some are stuck on the original mortgage?

Like with anything else, criteria changes as do circumstances.

With the increase in fee's actually starting for those first HTB borrowers, monthly commitments increase.

38% of those who are starting to pay fee's have a household income of less than 40k gross. (This is all in the government stats). Therefore, once an additional £60-80 a month kicks in on top of the mortgage, they can find affordability restrictions leaves them unable to re-mortgage. Not all of them, clearly.

(Taken from The Telegraph).

Carl31

i was afraid of this, whats to stop private investors jacking up the agreed interest rates when the loans were taken out? isn't this similar to the student loan thing?

HAMISH_MCTAVISH

Carl31 wrote: »

whats to stop private investors jacking up the agreed interest rates when the loans were taken out?

The loan contracts.;)

mayonnaise

HAMISH_MCTAVISH wrote: »

The loan contracts.;)

Exactly.
Similar to when Northern Rock's loan book was sold off to Sabadell, TSB, Cerberus, etc....terms weren't being changed.
A loan book is sold with all T&C's and contractual obligations attached to it.
A bit of a scare story if you ask me.

Graham_Devon

Carl31 wrote: »

i was afraid of this, whats to stop private investors jacking up the agreed interest rates when the loans were taken out? isn't this similar to the student loan thing?

Looks very similar in truth.

Graham_Devon

HAMISH_MCTAVISH wrote: »

The loan contracts.;)

Admitedly this will look like trying to create panic, which it's not, it's just an example of loan contracts changing.

I myself had my mortgage contract changed mid mortgage with the Halifax. There were threads on MSE about it.

Essentially Halifax applied a collar to the interest rate. This collar was not mentioned in the mortgage terms anywhere (as was pointed out by Martin Lewis himself). However, they changed the terms successfuly and bunged people "compensation".

That compensation didn't anywhere near cover the additional interest payments people would make now the collar was applied, but Halifax were successful in making the change mid term to anyone on SVR.

So let's not pretend loan terms can't change. They have (to thousand of Halifax mortgagees), did and very likely will again in the future.

The terms have effectively already changed as the promise not to sell these loans to private equity companies is clearly being broken right now...