Bradford & Bingley are DOOMED !

poppy10_2

Lotus-eater wrote: »

I asked a question, whats yours?

Hey, don't get the wrong idea, I didn't ask what your problem was, I asked what the problem was with discussing B&B's share price.

Peace, bro!

ian_duncan_smith

Just a thought, bad debt = repossessed houses. Those are then sold off at auction, so B and B effectively get whatever has been repaid on the loan already, plus the open market value of the house back almost immediately. Where's the loss in that? Good loan = stable long term income flow for bank; bad loan = capital returned almost intact.

I can understand if people said there would be a short term cash flow problem as they need to wait for customers to default for a few months before they can take the matter to court and reposses. From first default to money from the sale five to six months with no income from the investment. Once the money from the sales comes in and gets reinvested in fresh loans, the cycle will hopefully start again.

Anyone else follow or agree on this analysis or am I off the mark?

Banderman

no, don't understand. If a house at auction sells for less than the outstanding mortgage because of severe house price falls = big losses for B+B

ian_duncan_smith

But they have insurance, plus you need to factor in the loan installments that have already been met.

chopperharris

but if no one can get mortgages then the btl brigade should be quids in surely ??

I dont understand the philosphy on that btl loans breaking them , no subprime mortgages = folk can only BUT rent?

downward property price adjustments people , they happen , and eventually 105% mortgages will be standard at the door of another one , greed is a short term memmory , denial is beaten up only by "greed" and its beigger brother "ego".

darling should reduce savings tax , to same percentage as the accounts offer , ie 5 percent interest is 5 percent tax...Propping up bad credit should be done with good credit.In encouraging savings , and reducing debt , any length of recession can be lessened.....but it will take incentives.

Premier_2

ad44downey wrote: »

Yes, very true. The tide has obviously turned. The champagne will be flowing in the Bradford and Bingley boardroom tonight. :j

More bubbly tonight too :beer:

Share price increased by another 27.21% today. :j

Hope you haven't lost too much money shorting them

Gorgeous_George

Banderman wrote: »

no, don't understand. If a house at auction sells for less than the outstanding mortgage because of severe house price falls = big losses for B+B

No, a big loss for the mortgagee(s). They keep the debt (plus charges until the residual debt is repaid).

GG

Treadmill

I think I can say confidently and without fear of contradiction that B&B will not go bust, 27% up means the people in the know know something, expect a rescue package by close of play friday and a share price of above £1

Or maybe not (I'll edit this out on the I told you so post if the above turns out to be correct)

pickles110564

Gorgeous_George wrote: »

No, a big loss for the mortgagee(s). They keep the debt (plus charges until the residual debt is repaid).

GG

Surely GG BB are the losers.
If mortgage on property say Is £500K, goes to auction and sells for £250k, as you say mortgagee still owes BB £250k but they are never going to pay it back and go Bankrupt therefore BB short of £250K.

epz_2

pickles110564 wrote: »

Surely GG BB are the losers.
If mortgage on property say Is £500K, goes to auction and sells for £250k, as you say mortgagee still owes BB £250k but they are never going to pay it back and go Bankrupt therefore BB short of £250K.

if only it were that good, remember they are a major btl lender.

btler goes bust with 20 newbuilds and not only are they suddenly worth a fraction of the loan, but in effect the bank can't auction them all at once as it would destroy the rest of the market. They end up as a landlord at best in a time when what they really need is capital.


after northern rock the government should have made all banks put in place a system where the branches and savings side could quickly separated from the lending side.

next bank to fail would see depositors and branch infrastructure is sold quickly to keep money safe and repay some cash to creditors, tax man 1st. once the real peoples money is safe the share holders and upper management would then be left to deal with outstanding loans and it could be canabalised however was best with much less political pressure.