Carmine Posted September 14, 2006 Share Posted September 14, 2006 Back when I sold mortgages for a major building society based in the north of England I had to battle daily against "stupid people". They wanted to borrow so much more than they could afford and never seemed to understand why the institution wouldn't let them paddle themselves up sh*t creek. Link to comment Share on other sites More sharing options...
Cyclone Posted September 14, 2006 Share Posted September 14, 2006 They don't always lose money. I agree that it is stupid to borrow more money than you can pay back. But unfortnuately there are lots of stupid people. It doesn't help their lot to be taken advantage of by people and companies who should know better. they pretty much always do. If the house is worth more than the outstanding mortgage, then the people who are defaulting would normally just sell up, take the difference in their pockets and walk away into renting/council house land. Banks only foreclause as a last resort, and unless the mortgage has run for some time then the house will not be worth significantly more than the mortgage value. Couple that with them then offloading it as quickly as possible at lower than market value, plus having the actual costs of repossessing it, managing it and then selling it, and basically it's not what they want to do. They'll bend over backwards to avoid doing it infact. DF - I know what you mean, but you can't really blame someone else for your naevity. They thought you'd be able to pay it back, turns out they were correct, they didn't do anything wrong, either legally or morally. Link to comment Share on other sites More sharing options...
Waxen_Pith Posted September 14, 2006 Share Posted September 14, 2006 Banks only foreclause as a last resort, and unless the mortgage has run for some time then the house will not be worth significantly more than the mortgage value. QUOTE] Fair enough. But with the way the market has faired in the past ten years or so, I don't think that the 'some time' you mention has to be such a 'long time'! Link to comment Share on other sites More sharing options...
Cyclone Posted September 14, 2006 Share Posted September 14, 2006 quite true, a year is probably enough. But if you had a house with a years equity increase and realised you couldn't afford the mortgage anymore, you'd sell it and pocket the difference, not default and wait to be evicted. Link to comment Share on other sites More sharing options...
artisan Posted September 14, 2006 Share Posted September 14, 2006 only on a secured loan, and in the event of defaulting the mortgage lender has the first claim. Mortgage lenders loose money when they repossess and sell of a house, so why would they actively seek to cause that to happen? Even unsecured loans can take your house without even recourse to the courts. They can take out a charge against house through the land registry, or something. They can then apply for a possesion order. Their snide lawyers know all the tricks. Link to comment Share on other sites More sharing options...
Carmine Posted September 14, 2006 Share Posted September 14, 2006 Their snide lawyers know all the tricks. In my experience, the biggest "trick" and one which few seem to know is to read the small print and know your limits. Link to comment Share on other sites More sharing options...
hmr44 Posted September 14, 2006 Share Posted September 14, 2006 And you just had to take it..your life would end if you didn't . You took the money and blew it and now have to give it back. You got yourself into debt fella so stop blaming everyone else and accept the consequences. Ah but it is easy to do. I've got myself in quite a mess recently with my overdraft. You think 'Well I'll just get this, I'll pay it back when I get paid' and you do it every month until you're actually depending on the money in your overdraft limit. I've got a higher paid job now so will hopefully be able to sort it soon, but I just want to be able to get back into credit so much, I've given my card to my mum so I only have a set amount every month. I'm with First Direct (Part of the HSBC Group) and they are getting quite harsh on the overdraft limits too, and reducing my limit at the end of October. Link to comment Share on other sites More sharing options...
artisan Posted September 14, 2006 Share Posted September 14, 2006 In my experience, the biggest "trick" and one which few seem to know is to read the small print and know your limits. The best way is to avoid getting into their clutches in the first place. In my very nature I detest giving money to someone every month, so thay can sit on their lazy backsides and take the profit. The only thing I have is a mortgage, and it breaks my heart to pay it,even though it is not much these days But it is the principle of paying someone money every month, when the original sum borrowed was paid back years ago. By the time you pay a 25 year mortgage off you have paid something like three times the ammount you borrowed, I think. Link to comment Share on other sites More sharing options...
Cyclone Posted September 14, 2006 Share Posted September 14, 2006 Even unsecured loans can take your house without even recourse to the courts. They can take out a charge against house through the land registry, or something. They can then apply for a possesion order. Their snide lawyers know all the tricks. not strictly accurate. They have to apply to court to get the charge against the house, and even then the absolute most they can do is force you to sell the house in order to repay their charge. The lender applies to the court for a 'charge' against the property for the amount owed. Although it will mean that they won't get their money immediately, it will be passed on when the property is sold. But in extreme circumstances, the lender can force the borrower to sell their home to clear their debt. The practice appears to be something that the FSA is looking at, as it's considered unfair because the borrower pays a higher interest rate originally because the loan is unsecured. Link to comment Share on other sites More sharing options...
Cyclone Posted September 14, 2006 Share Posted September 14, 2006 The best way is to avoid getting into their clutches in the first place. In my very nature I detest giving money to someone every month, so thay can sit on their lazy backsides and take the profit. The only thing I have is a mortgage, and it breaks my heart to pay it,even though it is not much these days But it is the principle of paying someone money every month, when the original sum borrowed was paid back years ago. By the time you pay a 25 year mortgage off you have paid something like three times the ammount you borrowed, I think. The only reason they lend you the money in the first place is because both parties understand that you will pay back more than you borrow. If you didn't pay interest then there'd be no reason for anyone to ever lend you any money. Link to comment Share on other sites More sharing options...
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