Home repossessions soar. Up 61% from last year.

In message , Crowley writes

If that's the case, then there is a large element of personal responsibility involved. At least last time, there was an outside influence which caused it.

Personal "irresponsibility" may be more apt

I have no sympathy for people finding they can't keep up with those 6x their salary mortgages, or who claim to have had no idea what the repayments on that 7th loan or credit card would be. If you're stupid enough not to understand that money borrowed has to be paid back then thats your problem. Every credit agreement I've ever signed (and there've been a few...) tell me what the APR is, if its a loan how many repayments there are and how much they'll be. How difficukt can it be to decide if you can aford it or not?

At the same time the banks offering excessive amounts of credit need action taken against them. Its not their fault that people are stupid and greedy, but if they give someone a mortgage that common sense says they have no chance of repaying thats got to be wrong.

Ian

X-No-Archive: yes In message , Ian Bailey writes

My bank claim to have reverted to carrying out checks to ensure that potential mortgagees can afford the repayments. It sounds like the sort of things they used to do in the 1960s. I can't believe they actually do it now. After all, writing letters and so on means having to employ people to write them, and that will never do. Far cheaper to risk the occasional mortgage going t*ts up.

Is that your mistake or the bank's?

One would hope that at least the banks would know that the ones to whom mortgages are given are the mortgagees, and the ones who give them are the mortgagors.

"Ian Bailey" wrote

As difficult as *knowing* what income you'll be getting in 5, or 10+ (etc) years' time?

Tell us - do you know for *sure* what you'll be earning in 2010 & 2020 ?? Do you know what interest rates will be (on any variable interest loans, eg mortgage) ?

I would guess that he is talking about those people who borrow the maximum they can afford NOW, because you CAN'T know those things you talk about...

Commonsense would say that because of the variables, you don't borrow anywhere near the maximum amount. I borrowed

You were lucky enough to be in a situation when house prices were only

3x the average salary. Now they are 6x and rents are very high. The whining and complaining is due to the government, yet again, not being able to balance the the economy. I am self employed Historian, earn about 60K per year. I could afford to buy now, but there is no point as the UK is going into a serious recession. I understand this from past performance. As you stated, most people live do not look long term. Peer pressure is high to own your own property in the UK. Life is short & we all want to progress with our life quite quickly.

To be honest I'm not convinced governments have much control over bubbles. People love to ride a financial roller-coaster, and their sentiment drives it way beyond sensible limits, whether we're talking about housing or the stock market. It always ends in tears for the unwary.

Andrew McP

Have house prices really doubled in five years? I didn't think so (but then I don't pay too much attention to house prices since I am not thinking about buying (in this country) or moving). Even so, if I was to purchase a house now, it would be a smaller house to compensate for the rise in prices. It would have to be.

Not sure how the recession relates, unless you are buying to sell for a profit at X point in the future (in which case, I have even less sympathy!) If you are buying because you want to own the place you live in, the fact that prices might either fall, or simply stagnate for the next few years doesn't really make much difference. Negative equity only matters when you can't afford the repayments or are in a position where you must sell. By buying within your means (and expected means), the majority of people can avoid that completely. If the average price in my street halve in the next few years, my mortgage may well stay the same (or in fact be even lower due to falling interest rates that I would expect would be necessary to get the economy on track). So I am still living in the same house paying the same (or a similar) amount each month back to the bank.

Yep. Unfortunately too many people associate "progress" with owning a large house and having the newest car. People who complain about house prices while driving around in their £10k+ car need a good slap to wake them up. Especially when that car is on finance!

More evidence that the debt burden is beginning to bite from these repo figures out today.........

Home repossessions rocket This is Money

26 October 2005

THE number of orders for homes to be repossessed has rocketed by more than 50% as borrowers struggle to cope with mounting consumer debts.

DOING THE MATHS: Many families are finding they have overstretched themselves and are indanger of losing their homes

Figures from the Department for Constitutional Affairs showed that just under 30,000 mortgage possession applications were made in the courts by lenders in the three months to the end of September.

This is a 55% increase on the same period in 2004 and highlights the growing problem consumers are facing in meeting monthly repayments.

For the same period, figures show a 66% rise in orders made - where the court actually grants a home repossession. In total, 19,687 orders were made, 10,340 of which were suspended, which allows the borrower the chance to stay in their home if they meet missed payments.

While numbers still remain low compared with figures from the early nineties, repossessions mirror a 27.5% jump in personal bankruptcies.

The last large rise in the nineties was driven by soaring interest rates, but the present increase is attributable to the high level of debt borrowers have on cards and loans.

It also shows lenders' willingness to go to the courts to claw their cash back from defaulting borrowers. Most of the major banks admitted to growing levels of bad debts in the latest round of results reporting.

Lenders have blamed rising repossessions on five interest rate rises in

2003 and 2004. The Bank of England trimmed rates to 4.5% in August, offering some respite to borrowers.

The second quarter of 2005 showed a 61% leap in repossession actions by mortgage lenders compared with the same period last year.

A spokeswoman for the Consumer Credit Counselling Service said borrowers should be given more information on which lenders are going to court.

She said: 'People are taking out secured and unsecured loans and more and more lenders are prepared to go to the courts to get their money back. Consumers should be given the right information before taking the loan to avoid this problem.'

However, the Council of Mortgage Lenders said the figures misrepresented how many homes were actually being taken by lenders.

It said out of 32,366 orders made in the first half of the year, only

4,640 homes were actually repossessed. The CML added that although lenders go to the courts, they are usually trying to commit the borrower to disciplined payments rather than take their home.

This woman must be a little retarded. She speaks as if the banks are going to Court out of some kind of malice rather than to recover the funds faithfully entrusted to them by depositors and shareholders and loaned under specific terms of repayment.

Perhaps if there are banks who'll be careless about loans to defaulters as to not pursue them, depositors and shareholders ought to be given this information before depositing money or buying their shares, to avoid this problem.

I damn well hope my bank is pursuing folks trying to run off with my cash to the fullest vigour and extent of the Law.

FoFP

In message , Crowley writes

In the early/mid '90's, most of the repossessions I attended were tenanted where landlords had collected the rent and not paid the mortgage. So it is quite possible that of the 4640, a large number are not the owners' home.

I'm not saying that there were no cases where people lost there homes, (rather than "businessmen" losing their investments), but it was not the massive number that was published.

In message , M Holmes writes

Ditto!!

How does that compare to historical figures Crowley?

Historically these repo figures are low but we are really just embarking on the upward cycle for repossessions.

IMO the curent state of the housing market can be compared to 1989/90 when house prices had peaked and were starting the downward cycle which lasted until 95/96.

Like today, repos in 1989 were below average but within only 2 years had increased by 500% to their peak in 1991 of 75,540 (from just 15,810 in 1989)

Here's the annual figures from the Council of Mortgage Lenders.....

and there's some interesting debate on this (mainly from a bearish perspective) on housepricecrash forum......

"

Of course, if we were look at the "growth in repossessions", we would see that it is on a "downwards trend", something that the nay-sayers like to do to house prices no less :)

"Crowley" wrote

Ermmm - that's less than a 378% increase. Where did 500% come from?

Increased /to nearly/ 500% of the 1989 value?