THE HOUSE PRICE CON

[B.O.B DOLE]

These days banks encourage us to lie about are earnings to get a massive morgage. Back 10 years ago just before labour got into power
the interest rates where about 11.5%.Then labour got into power and gordon brown had an idea, From now on we will base the a morgage on two lenders instead of one. We can lower the interest rates and triple the lending time from an average of 10 to 15 years to 25 to 35 years and qwadruple the price for a terrace. And like most marriages do!! Break up after 3 years or so. AND guess what the bank gets the house.

 

[TexMex]

Banks encourage borrowers to lie about our earnings. Borrowers lie about their earnings. Borrowers decide to borrow so much that need to take out a longer term mortgage than in the past. All this behaviour pushes up the price of property. Borrowers have decided to take out joint mortgages, with short term partners.

All Gordon Brown has done is put control of interest rates in the hands of the Bank of England. The Bank of England has maintained a much lower interest rate than in previous decades.

So how, exactly, do you find Gordon Brown responsible for the greed of banks and their customers?

 

[B.O.B DOLE]

Banks encourage borrowers to lie about our earnings. Borrowers lie about their earnings. Borrowers decide to borrow so much that need to take out a longer term mortgage than in the past. All this behaviour pushes up the price of property. Borrowers have decided to take out joint mortgages, with short term partners.

All Gordon Brown has done is put control of interest rates in the hands of the Bank of England. The Bank of England has maintained a much lower interest rate than in previous decades.

So how, exactly, do you find Gordon Brown responsible for the greed of banks and their customers?

Dont be so nieve... In your statement you say

quote="TexMex"]Banks encourage borrowers to lie about our earnings.

This is part of the con. to get you to borrow more money

and also in your statement you say:-
Borrowers lie about their earnings.

They have to to get the morgage in the first place

and you also quote:-
b]Borrowers[/b] decide to borrow so much that need to take out a longer term mortgage than in the past.

Because they have no choice it is snow balling

 

[TexMex]

b]Borrowers[/b] decide to borrow so much that need to take out a longer term mortgage than in the past.

Because they have no choice it is snow balling

Rent? Move to another area? Stay put where they are? The people that are borrowing more than they can afford (and more than the property is actually worth), are contributing to the problem. As long as people are prepared (and can find the means) to pay OTT prices for homes, homes will remain over priced.

But what has any of this to do with Gordon Brown? He's not a banker offering mortgages beyond clients meens, he doesn't fix house prices (that's dictated by natural market forces). So I fail to see how this is part of some Gordon Brown conspiracy.

 

[B.O.B DOLE]

b]Borrowers[/b] decide to borrow so much that need to take out a longer term mortgage than in the past.

Because they have no choice it is snow balling

Rent? Move to another area? Stay put where they are? The people that are borrowing more than they can afford (and more than the property is actually worth), are contributing to the problem. As long as people are prepared (and can find the means) to pay OTT prices for homes, homes will remain over priced.

But what has any of this to do with Gordon Brown? He's not a banker offering mortgages beyond clients meens, he doesn't fix house prices (that's dictated by natural market forces). So I fail to see how this is part of some Gordon Brown conspiracy.

Do you really think that the gov and banks are not connected
In the ideal world or star trek probably !! NO
But this is the real world politicians are corrupt

 

[TexMex]

You've missed another vital point. It's not in the banks interest to foreclose on a mortgage. Once they do that, they have to sell it on, to recoup the outstanding capital. Any extra that they achieve on the sale of the property goes back to the mortgagee. Game over.

While you're paying a mortgage, the banks are raking in the interest. Once they foreclose and liquidate the property, they stop earning.

So in this sureal world where the banks are actualy working for Gordon Brown and he's instructed them all to trick the customers into insolvency, he seems to have shot himself in the foot

 

[securespark]

I tend to agree with you, Tex.

My mortgage lender offered me a 100% mortgage in 1991. The terms were a mortgage where we were jointly and severally liable, and if we should split up and one move out, the bank would repossess, as the terms were that both lenders should occupy the property. I split up with my wife in 1992, and moved out. The bank insisted I pay the whole mortgage, which I managed to do for 6 months. Then I insisted they turf my ex out as she (and they) were breaking the terms of the agreement. They refused (as did my ex), and the thing dragged on until 1997 when they repossessed, sold for a third of the purchase price, and tried to get me for the shortfall, whereupon I offered them 2.5K, my total worldly goods at the time. I told them that if this was not acceptable, I would take bankruptcy. They took the money.

 

[TexMex]

Simon, sorry to hear of your problems, I'm surprised that they made such a shortfall on the sale. As I say, the banks only take what's due them, out of the procedes of the sale. As a result, they do as little as legally possible to get the best deal for the house. The quicker they sell it the better. But to actually sell it for less than they are due is just plain incompetence.

Joint mortgages are not a new thing though I took out my first (95%) mortgage in about 1982. Was a joint one with my current wife (Just coming up for our silver wedding aniversary in July) . In them days, you could borrow 3x single salary or 2.5 x joint salary. I gather that some banks offer more than that now. We actually only borrowed 3x my own anual salary at the time.

I am rather suspicious, however, that there is so much cash being offered by finance companies. Judging by the number of adds for loans/mortgages, They seem to pay about 90% of independant TV funding and still have enough left over to make the loans themselves.

Is there any connection between this sudden affluence of finance companies and their recent failures to pay out on pension schemes related?

This also increased the price of property, as many people now buy second/third (or more) properties as an investment, instead of paying into a pension. Since this adds to the number of buyers, supply and demand naturaly dictates that properties will go up in price.

I suspect that these buyers for investment purposes will, sooner or later, be targetted by the government (if not this one, It's bound to happen). My guess is some sort of change to capital gains taxation. As soon as it happens, they will all be clamouring to sell their portfolios and the price of property could take a nose dive. When it does, remember, you heard it here first.

 

[pipme]

A friend of mine in the legal business, made a small fortune back in the property crash, buying up repos at the lowest price ..ie that which repays the lenders outstanding dosh !! Never saw them wait on 'best buyer' or market price.
How about the poor souls who posted the keys back to the building society due to inability to pay, then disappeared ? Years later they have been chased for the difference between what they owed on the property and the sale receipts .. never mind the horrendous interest accruing ... shot gun or bankruptcy ?

Another weird one, back in the 70's a friend's mum had to go into care, at the time her house was sold to fund the care .. The friend was NOT allowed to place the sale money in a relatively safe, high interest Building society savings account .. he was ordered to place it in a very low interest 'safe' account by the court ... Once one is in trouble the vultures are circling .. Sad world isn't it ? I hope the law on the latter situation has changed .. but I wouldn't be sure ...
Look at BCCI ongoing saga .. What if one had a mortgage or savings with that bank ?
BTW .. the bank is only liable for around £30k total for your named accounts with them, if one had three or four with 25k in each, in the BCCI melt down situation .. they'd be liable for £30k'ish total, the frightener is only around £3k comes up front .. one has to wait for the rest of the £30k... How long ?
Dangerous place, swimming with the sharks of finance.

 

[Scoby_Beasley]

It's all about global warming really. I mean, who can afford to put a roof over their heads and run a nasty polluting car ?

 

[pipme]

Tis the third motor that causes the problem ...

 

[securespark]

It's greed again, Tex.

They told me (brazen as you like) that they would sell the house quickly, and they did not care what they got for it, because they would be chasing me (no mention of my wife) for the rest.

Anyway, I'm very glad to say, it is all sorted now, and I am enjoying my current home mortgage-free!!

 

[AdamW]

When I took out my mortgage, the building society asked for the name and address of my company, and the phone number of the payroll department. As I had alraedy stated my earnings on the application, I had no problem with them contacting the payroll and confirming how much I earn. OK, they are hardly going to give out my info to anyone who asks for it, but a photocopy of a payslip is no big deal. Remember, I have already told them how much I earn.

So, why don't lenders ALWAYS have this info? If people didn't lie about their earnings, then house prices wouldn't rise so quickly. Say someone on £25K claims to be on £30K, that means they can get another £20K on a 4x mortgage, which means houses will go up in price accordingly. Not as much as 20K, because surely only a few lie. But it will still be a couple of K.

It seems that lenders asking a borrower how much they earn get as accurate an answer as a woman asking a man how long his woo-woo is...

Simon, sorry to hear that. It seems that possession of testes is a crime in the eyes of the house-ownership police. My neighbour got stung when he split up with his GIRLFRIEND (not even wife, and there were no kids) because despite him having paid the mortgage and having lived there before even meeting her, she still managed to walk away with half the sale value of the house. The guy was to blame for the break-up, but it still doesn't seem fair.

Good to see that you are enjoying life with Julie Spark and the kids though, even my capitalist morals favour family over possessions.

 

[securespark]

woo-woo

My neighbour got stung when he split up with his GIRLFRIEND (not even wife, and there were no kids) because despite him having paid the mortgage and having lived there before even meeting her, she still managed to walk away with half the sale value of the house.

Find that incredible. I'm sure he fought it all the way, but still seems amazing that she could get so much.

Good to see that you are enjoying life with Julie Spark and the kids though, even my capitalist morals favour family over possessions.

Thanks, mate.

Gosh, that sounded very Smashy & Nicey, didn't it, mate?

And now for some Bachman Turner Overdrive.....

 

[TexMex]

Gosh, that sounded very Smashy & Nicey, didn't it, mate?

Not arf.