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  • FIRST POST
    • MSE Guy
    • By MSE Guy 3rd Apr 12, 1:48 PM
    • 1,628Posts
    • 1,255Thanks
    MSE Guy
    MSE News: Mortgage prisoners need help to escape costly loans, watchdog told
    • #1
    • 3rd Apr 12, 1:48 PM
    MSE News: Mortgage prisoners need help to escape costly loans, watchdog told 3rd Apr 12 at 1:48 PM
    This is the discussion thread for the following MSE News Story:

    "The Financial Services Consumer Panel wants a new rule to allow those who cannot switch to have more freedom ..."

Page 1
  • carlaeliza
    • #2
    • 3rd Apr 12, 2:12 PM
    'mortgage prisoner
    • #2
    • 3rd Apr 12, 2:12 PM
    I was slightly relieved to be given a label! I am a "mortgage prisoner", I try not to think about it most of the time, but not only did i take out 100% loan, it was split in two by a builders incentive to buy a new build...... I had 10 years to pay back the second mortgage but sadly i assumed we'd be able to move long before the 10 years were up...... no such hope now,..... the property is worth less than i payed and others in my block can't sell even at the lower value!! I have 3.5 years to save 50k or try and convince a lender to help...... hopeless! And if rates rise then im screwed! (Crest Nicholson's easybuy)
    • The Pixi
    • By The Pixi 3rd Apr 12, 3:02 PM
    • 298 Posts
    • 234 Thanks
    The Pixi
    • #3
    • 3rd Apr 12, 3:02 PM
    • #3
    • 3rd Apr 12, 3:02 PM
    My opinion on the situation,

    Tough!

    My savings rates aren't getting any better.
    Mortgage Balance 182,789.00 of 259,250.00 Overpayment Total 48,847.13
    Monthly payment down 258.82 Overpaid last month 1096.38
    End of month 11/2017
    • Peelerfart
    • By Peelerfart 3rd Apr 12, 3:40 PM
    • 1,998 Posts
    • 1,720 Thanks
    Peelerfart
    • #4
    • 3rd Apr 12, 3:40 PM
    • #4
    • 3rd Apr 12, 3:40 PM
    My opinion on the situation,

    Tough!

    My savings rates aren't getting any better.
    Originally posted by The Pixi
    So you don't care about repo's and banks potentially profiteering from customers who cannot move just so you can have a few extra meals out - nice!
    Space available for rent
    • WestonDave
    • By WestonDave 3rd Apr 12, 3:40 PM
    • 5,038 Posts
    • 8,521 Thanks
    WestonDave
    • #5
    • 3rd Apr 12, 3:40 PM
    • #5
    • 3rd Apr 12, 3:40 PM
    "These increases are inconsistent with the principle of treating customers fairly and could be addressed if the FSA introduces a new rule as we suggest."

    Tosh and pointless. Higher risk has always meant higher rates - which is why unsecured borrowing has always had higher rates than mortgages. These "prisoners" have moved themselves into a mix of mortgage and unsecured borrowing (to the extent that they are in neg eq the excess of borrowing over value is effectively an unsecured loan).

    Even if the FSA introduces a muppets charter as suggested (why is it that its always the ones who did something daft that need protecting at the expense of the rest who used some sense?) it still won't mean other lenders will be willing to take people from other lenders with sky high rates. Does anyone really think that if Halifax shoves its SVR up to 10%, HSBC will want to take a load of negative equity loans at 4.5%? If anything it risks an upward spiral in an attempt to push people off to someone else because when people squeal about rate rises the lender can just say "Well move then - the FSA have provision in the rules to do it - but if you can't find a lender that wants you, its right that we price the risk accordingly!"
    Adventure before Dementia!
    • one2escape
    • By one2escape 3rd Apr 12, 3:54 PM
    • 136 Posts
    • 65 Thanks
    one2escape
    • #6
    • 3rd Apr 12, 3:54 PM
    • #6
    • 3rd Apr 12, 3:54 PM
    So you don't care about repo's and banks potentially profiteering from customers who cannot move just so you can have a few extra meals out - nice!
    Originally posted by Peelerfart
    Cant wait for these people to get a reminder of this when the numbers of bankrupcy case rise dramtically. It is no longer a case of if but when. Im in 80k negative equality and if my rates increase anymore its bankrupcy for me. Who does bankrupcy and repos help? House prices are only go one way now and it aint up.
    • The Pixi
    • By The Pixi 3rd Apr 12, 3:57 PM
    • 298 Posts
    • 234 Thanks
    The Pixi
    • #7
    • 3rd Apr 12, 3:57 PM
    • #7
    • 3rd Apr 12, 3:57 PM
    So you don't care about repo's and banks potentially profiteering from customers who cannot move just so you can have a few extra meals out -
    Originally posted by Peelerfart
    No I don't, and I dont understand why you would think I would/should? I think that's something the person who is 'trapped' should have been thinking about when they considered getting themselves a 100% mortgage (gamble if you will)


    nice!
    Originally posted by Peelerfart
    It's finance, it's not nice - my saving rate is testament to that, along with all those suffering the consequences of the financial meltdown...

    Remember 'we're all in this together'
    Mortgage Balance 182,789.00 of 259,250.00 Overpayment Total 48,847.13
    Monthly payment down 258.82 Overpaid last month 1096.38
    End of month 11/2017
    • The Pixi
    • By The Pixi 3rd Apr 12, 4:01 PM
    • 298 Posts
    • 234 Thanks
    The Pixi
    • #8
    • 3rd Apr 12, 4:01 PM
    • #8
    • 3rd Apr 12, 4:01 PM
    Cant wait for these people to get a reminder of this when the numbers of bankrupcy case rise dramtically. It is no longer a case of if but when. Im in 80k negative equality and if my rates increase anymore its bankrupcy for me. Who does bankrupcy and repos help? House prices are only go one way now and it aint up.
    Originally posted by one2escape
    I do sympathise with those who are facing this reality, but at the same time I dont think much should be done to help.

    You also seem to be suggesting that everyone wants house prices to rise - I think they should fall, but I in no way think it wont be an unpleasant and messy affair.
    Mortgage Balance 182,789.00 of 259,250.00 Overpayment Total 48,847.13
    Monthly payment down 258.82 Overpaid last month 1096.38
    End of month 11/2017
    • Consumerist
    • By Consumerist 3rd Apr 12, 4:18 PM
    • 5,198 Posts
    • 2,602 Thanks
    Consumerist
    • #9
    • 3rd Apr 12, 4:18 PM
    • #9
    • 3rd Apr 12, 4:18 PM
    My opinion on the situation, Tough! My savings rates aren't getting any better.
    Originally posted by The Pixi
    Wait till you get a mortgage. I suspect that you won't give a fig about savings rates when the boot's on the other foot.
    Warning: In the kingdom of the blind, the one-eyed man is king.
    • VT82
    • By VT82 3rd Apr 12, 4:25 PM
    • 1,038 Posts
    • 877 Thanks
    VT82
    My opinion on the situation,

    Tough!

    My savings rates aren't getting any better.
    Originally posted by The Pixi
    This kind of attitude is to be expected from the elderly relying on their savings interest to live. But according to your sig, you've only got 20k in savings. Granted, to some people it's a lot of money, but if savings rates go up by 1% across the board, you'll only be 200 a year (less tax) better off. And the fact that you can save 500 a month means you're hardly struggling. Is 200 a year really enough of a difference to have turned you so heartless and short-sighted over the situation?

    I've now got more in savings than in floating rate borrowings, and my pension would be a lot healthier if rates rise, but I can deal with interest rates being low for the good of the economy, which like it or not, means it's ultimately good for you.
  • ILW
    So you don't care about repo's and banks potentially profiteering from customers who cannot move just so you can have a few extra meals out - nice!
    Originally posted by Peelerfart
    Nobody forced them into taking out the mortgage.
  • ILW
    Cant wait for these people to get a reminder of this when the numbers of bankrupcy case rise dramtically. It is no longer a case of if but when. Im in 80k negative equality and if my rates increase anymore its bankrupcy for me. Who does bankrupcy and repos help? House prices are only go one way now and it aint up.
    Originally posted by one2escape
    If you took on a mortgage relying on rates to stay below 5% or so, I would suggest that you were being rather reckless.
    • silvercar
    • By silvercar 3rd Apr 12, 4:48 PM
    • 38,999 Posts
    • 162,545 Thanks
    silvercar
    There is a big difference between repossession and bankruptcy, I wish people would stop thinking that one follows from the other.

    Plus banks are only repossessing when people don't keep up with their repayments - if you carry on paying your mortgage you won't be repossessed, even if you are in negative equity. In fact in the 1980s recession people were repossessed when they missed 3 mortgage repayments, nowadays lenders are trying to do far more to help borrowers avoid repossession.
    • The Pixi
    • By The Pixi 3rd Apr 12, 5:07 PM
    • 298 Posts
    • 234 Thanks
    The Pixi
    This kind of attitude is to be expected from the elderly relying on their savings interest to live. But according to your sig, you've only got 20k in savings. Granted, to some people it's a lot of money, but if savings rates go up by 1% across the board, you'll only be 200 a year (less tax) better off. And the fact that you can save 500 a month means you're hardly struggling. Is 200 a year really enough of a difference to have turned you so heartless and short-sighted over the situation?

    I've now got more in savings than in floating rate borrowings, and my pension would be a lot healthier if rates rise, but I can deal with interest rates being low for the good of the economy, which like it or not, means it's ultimately good for you.
    Originally posted by VT82
    I'm not elderly, I'm saving up a deposit.

    Your numbers are interesting and I'd argue too low however 200 a year is better off in my pocket than helping out those with self subscribed financial problems, according to those mock up Tax bills enough of my hard earned money is already doing that

    Short sighted? Being annoyed at having to suffer low savings rates to try and keep people, who took out mortgages more than the cost of the underlying assets, in thier homes! Dear me, it isn't me being short sighted.

    The last part of your post is admirable, financially slack in my opinion though.
    Last edited by The Pixi; 03-04-2012 at 5:14 PM.
    Mortgage Balance 182,789.00 of 259,250.00 Overpayment Total 48,847.13
    Monthly payment down 258.82 Overpaid last month 1096.38
    End of month 11/2017
    • no debt
    • By no debt 3rd Apr 12, 5:35 PM
    • 20 Posts
    • 12 Thanks
    no debt
    this is my first post all i can say is you got a house .for what you paid for it. for .what you think it was worth its a roof over you and your famileys head so what if its in negifity equity its a home for what you was prepared to pay .
    • Consumerist
    • By Consumerist 3rd Apr 12, 5:51 PM
    • 5,198 Posts
    • 2,602 Thanks
    Consumerist
    Remember 'we're all in this together'
    Originally posted by The Pixi
    As long as the "we" doesn't include you, that is.
    Warning: In the kingdom of the blind, the one-eyed man is king.
    • Consumerist
    • By Consumerist 3rd Apr 12, 6:01 PM
    • 5,198 Posts
    • 2,602 Thanks
    Consumerist
    this is my first post all i can say is you got a house .for what you paid for it. for .what you think it was worth its a roof over you and your famileys head so what if its in negifity equity its a home for what you was prepared to pay .
    Originally posted by no debt
    Hi no debt and welcome to the forum

    What you are saying is true until you can't afford the mortgage repayments and the lender repossesses the house.

    If the house is repossessed when you are in negative equity then the lender will hound you for payment of the difference between what you owed and what your former home was sold for.
    Warning: In the kingdom of the blind, the one-eyed man is king.
    • Thrugelmir
    • By Thrugelmir 3rd Apr 12, 6:05 PM
    • 63,137 Posts
    • 56,033 Thanks
    Thrugelmir
    Is this challenging?

    Halifax is raising its SVR for 850,000 borrowers from 3.5% to 3.99% on 1 May.

    Another 30,000 Clydesdale/Yorkshire Bank customers will see their SVR jump from 4.59% to 4.95%, and 54,000 Co-operative Bank and Britannia homeowners will see their SVR rise from 4.24% to 4.74%, also on the same day.
    If a rate at this level is unaffordable then renting would seem a better option. Whilst some people are facing financial difficulty. The majority should be able to overpay even its just a few pounds a month.
    "'The true investor . . . will do better if he forgets about the stock market and pays attention to their dividend returns and to the operating results of their companies.'" - John Bogle
    • The Pixi
    • By The Pixi 3rd Apr 12, 6:06 PM
    • 298 Posts
    • 234 Thanks
    The Pixi
    As long as the "we" doesn't include you, that is.
    Originally posted by Consumerist
    Yes I'd rather it didn't include me, after all Mr/Mrs negative equity didn't ask my approval when they took out the mortgage, why should I be financially hindered to help them?

    I am already, and I'm quite free to say, that I don't like it, and those that overstreched should not receive any help and we should allow the correct procedure to take place. Mass repossessions and falling house prices that is how people learn, tough but fair.

    The quote was ironic, we are not all in this together! 50p tax rate cut Pfft.
    Last edited by The Pixi; 03-04-2012 at 6:11 PM.
    Mortgage Balance 182,789.00 of 259,250.00 Overpayment Total 48,847.13
    Monthly payment down 258.82 Overpaid last month 1096.38
    End of month 11/2017
    • ashleypride
    • By ashleypride 3rd Apr 12, 6:39 PM
    • 609 Posts
    • 690 Thanks
    ashleypride
    Yes I'd rather it didn't include me, after all Mr/Mrs negative equity didn't ask my approval when they took out the mortgage, why should I be financially hindered to help them?

    I am already, and I'm quite free to say, that I don't like it, and those that overstreched should not receive any help and we should allow the correct procedure to take place. Mass repossessions and falling house prices that is how people learn, tough but fair.

    The quote was ironic, we are not all in this together! 50p tax rate cut Pfft.
    Originally posted by The Pixi
    Couldn't agree more, and lets be honest, all the people gambling on house prices ever increasing is a major reason why we are in this mess in the first place.
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