MSE News: Mortgage prisoners need help to escape costly loans, watchdog told

Former_MSE_Guy · 3 April 2012 at 2:48PM

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 ..."

Read the full story:
Mortgage prisoners need help to escape costly loans, watchdog told

carlaeliza · 3 April 2012 at 3:12PM

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 · 3 April 2012 at 4:02PM

My opinion on the situation,

Tough!

My savings rates aren't getting any better.

Peelerfart · 3 April 2012 at 4:40PM

The_Pixi wrote: »

My opinion on the situation,

Tough!

My savings rates aren't getting any better.

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!

WestonDave · 3 April 2012 at 4:40PM

"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!"

one2escape · 3 April 2012 at 4:54PM

Peelerfart wrote: »

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!

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 · 3 April 2012 at 4:57PM

Peelerfart wrote: »

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 -

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)

Peelerfart wrote: »

nice!

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' :cool:

The_Pixi · 3 April 2012 at 5:01PM

one2escape wrote: »

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.

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.

Consumerist · 3 April 2012 at 5:18PM

The_Pixi wrote: »

My opinion on the situation, Tough! My savings rates aren't getting any better.

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.

VT82 · 3 April 2012 at 5:25PM

The_Pixi wrote: »

My opinion on the situation,

Tough!

My savings rates aren't getting any better.

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 · 3 April 2012 at 5:32PM

Peelerfart wrote: »

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!

Nobody forced them into taking out the mortgage.

MSE News: Mortgage prisoners need help to escape costly loans, watchdog told

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