Whats going to happen to those who cant remortgage??

missk_ensington

InMyDreams wrote: »

I'm sorry if I was a bit short. I am confused how you can on one hand feel that your illegal act is perfectly reasonable, appropriate and sensible, yet on the other, pour such scorn on those caught in a terrible trap, who whilst might not have acted in the most sensible manner at least did so within the confines of law. Calling them idiots now doesn't help. Hindsight is a wonderful thing. If things go belly-up for you, I don't think you'd find much sympathy on this board either.

You want to go into the mortgage brokerage business. Will you be suggesting this course of action for clients in your position?

Hindsight? What you mean these people didnt have the intelligence to foresee the possible consequences on borrowing 25% more than the house was worth?!?!?!?! And this method of borrowing is purely to get extra cash to spend doing whatever. I dont see how you can equate that to my situation. I am intellligent, have an IQ of 148 apparently, I used that God given intelligence to make money and after a lifetime of ducking and diving, getting a slightly hooky mortgage that doesnt hurt anyone and helps me pay off half my mortgage at 22 doesn't even occur in my catalogue of 'illegal acts'. Nor do I find it immoral, since no one was ever going to get hurt.

Okay, you can say that I had no guarantee of success and could have goosed the whole housing project, but that was a well assessed risk and I believed in my own capabilities and was right to do so

As fpor what I'll be advising my clients, no I would never advise them to inflate their income because although I know I'd rather swing my handbag round the docks on a Friday night than default a payment, I could never trust other people to be as financially competent and that would come back and bite me iin the !!!. However, if I was a broker a few years ago I would never have co-ordinated a 125% mortgage for someone, even though THAT is perfectly legal

cupid_s

I used to have no sympathy for people who took out ridiculous mortgages. When I took out mine I was a student (still am) and DH was earning 14k a year. We had a large deposit and needed 70k but the bank tried to tell us we could have 96k. I had worked out a detailed budget, and knew that even with my student grant that we would struggle to repay that. I also wanted to make sure we could afford the repayments even if the interest rate had gone up to 10% plus.

However not everone is a good with money things as I am, and that doesn't mean they deserve the situation they now find themselves in. Many people, if told by a bank that they can afford 96k mortgage, would believe them. Surely the banks have expertise in this and know?

I think that most people could afford 8% mortgages, but like missk would have to go without certain things. If people are willing to do this then hopefully they'll come out the other side unscathed and with a better appreciation of money and material things. If not then they'll lose out but much of the blame will lie with them.

Incidentally my SVR is 5.94% - who the hell did all you get your mortgage with to be paying such a high rate - and did you not consider this when applying for a mortgage?

InMyDreams

missk_ensington wrote: »

Hindsight? What you mean these people didnt have the intelligence to foresee the possible consequences on borrowing 25% more than the house was worth?!?!?!?! And this method of borrowing is purely to get extra cash to spend doing whatever. I dont see how you can equate that to my situation. I am intellligent, have an IQ of 148 apparently, I used that God given intelligence to make money and after a lifetime of ducking and diving, getting a slightly hooky mortgage that doesnt hurt anyone and helps me pay off half my mortgage at 22 doesn't even occur in my catalogue of 'illegal acts'. Nor do I find it immoral, since no one was ever going to get hurt.

Okay, you can say that I had no guarantee of success and could have goosed the whole housing project, but that was a well assessed risk and I believed in my own capabilities and was right to do so

I'm really not sure how to answer any of that. I'm pleased for you. I hope things work out. You know what you are doing.

missk_ensington

cupid_s wrote: »

Incidentally my SVR is 5.94% - who the hell did all you get your mortgage with to be paying such a high rate - and did you not consider this when applying for a mortgage?

Thanks, yes I did consider this but had no intention of paying it because I knew I'd remortgage before the fixed rate ran out, or shortly after. Its high because I am on a self-cert mortgage, and wasnt in a position to be choosy about what mortgage I was given

beecher

cupid_s wrote: »

Incidentally my SVR is 5.94% - who the hell did all you get your mortgage with to be paying such a high rate - and did you not consider this when applying for a mortgage?

That's very low - are you sure you're looking at the present SVR and not the one you were quoted at the time of your deal? The one I was quoted was also very low at the time, probably near to what you were quoted, but is now 7.25%. I don't tend to consider this when applying for a mortgage as my LTV is 30% (at the moment anyway...)

missk_ensington

InMyDreams - thanks, people in business take risks all the time and people in business often do things that I deem to be immoral, yet not illegal. This may be illegal, but it isn't immoral (actually im entitled to Income Support and HB as a single parent and if I exerted that right instead of doing this, would be costing the taxpayer about £1000 a month)

DaiJoA

Just to add a slight twist to the thread, I'd like to share my personal - and true - experiences of just two examples as to how a reposession is created:-

Situation 1:- Our old neighbours brought thier house at a massive discount from the council, say £60k for a £130k house; they then borrowed against the house right the way up until the top of the equity - kitchens, bathrooms, cars, tvs, 4 childrens worth of toys, clothes, etc, holidays. They use the money borrowed to meet the re-payments until this too ran out. They both give up work presumably thinking they could claim from the country, which you can't until you've been claiming for a certain amount of time, and then it only pays the interest. No payments made. House gets repossessed. House mysteriously burns down. People disappear.

Situation 2:- Brand new flat on development in over-subscribed flat market gets practically given away to a foreign national, who lets it on housing benefit to a foriegn buddy and pockets around six months worth of housing benefit plus the deposit, again supplied by the state. foriegn housing benefit claimant sub-lets to two sweet innocent female house sharers, giving deposit to his landlord. benefits agency finds out, mortgage not paid, house sharers homeless. Repeat x 20, both people disappear back to home countries.

How many of the above examples do you think makes up the current quota of repossessions? Quite a few I think.

VickyA_2

This story was on the front page of today's Telegraph, which I read whilst having a non-essential cappucino. :whistle:

I find it very very worrying that people see this as a "way out" - probably because I spend too much time on here!

http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2008/04/03/ncredit103.xml

missk_ensington

DaiJoA wrote: »

Situation 2:- Brand new flat on development in over-subscribed flat market gets practically given away to a foreign national, who lets it on housing benefit to a foriegn buddy and pockets around six months worth of housing benefit plus the deposit, again supplied by the state. foriegn housing benefit claimant sub-lets to two sweet innocent female house sharers, giving deposit to his landlord. benefits agency finds out, mortgage not paid, house sharers homeless. Repeat x 20, both people disappear back to home countries.

How many of the above examples do you think makes up the current quota of repossessions? Quite a few I think.

Well wouldnt the owner of this over-subscribed flat not just find a new tenant?

DaiJoA

Reading the two linked articles makes my heart sink of us EVER being able to get another mortgage deal, especially as my dh is 37

Back in April 06 we - earning a joint salary of nearly 30k - were offered up to £127k on 2yr fixed, or up to £144k on 5yr fixed, at rate of 5.99, 100% LTV

seems like another universe compared to now! even with a £10k deposit, we'll still need 90% LTV at least, that won't be until another 12m at least but still, the way high LTV products are being withdrawn...... it looks like many days of saving ahead!