Why the double standards?

[mark vincent]

The American government intends to bail out banks and loan companies who have got themselves in trouble, because in the pursuit of quick profits the got greedy and loaned large sums of money to serial defaulters and the unemployed.

In this country the government is considering following America's example. As we have rising unemployment due to the activities of the American banks and others, why are the unemployed treated as pariahs and scroungers who don't deserve sympathy while Governments fall over themselves to hand over taxpayers money to a bunch of greedy bankers.

 

[noseall]

bunch of greedy bankers.

i think you'll find the collective name for bankers is a wunch.

 

[Donkmeister]

why are the unemployed treated as pariahs and scroungers who don't deserve sympathy while Governments fall over themselves to hand over taxpayers money to a bunch of greedy bankers.

I'm not sure if that's the case. The effect of those governmental actions is to ensure that people don't find themselves out of a home... the mortgage is an interest in the house, and the outstanding loan is a liquidatable (liquefiable?!) asset to the lender.

So if your lender goes belly-up, you might find yourself out of a dwelling.

As to sub-prime borrowers being pariahs, the story I always see in the news is that there's blame on both sides. Lender and borrower are both at fault: don't lend money to someone who can't pay it back, and don't borrow money you can't afford to repay!

Nothing wrong with borrowing if you need it and you can afford it though. Perhaps the lesson for the future is to abolish all variable rate loans? Fixed interest from loan start, at the lender's risk (don't worry, he'll ensure that he makes a profit). Would be more expensive in the good times, but better overall.

 

[mark vincent]

A mortgage is supposed to be a loan secured on property, doesn't the agreement work both ways, one of the terms on a mortgage states that if you don't keep up your repayments your house can be repossessed,

if the lender goes belly up through their own mismanagement then they have broken the terms of the agreement. As long as the home owner keeps up the agreed payments on the mortgage how can his home be taken off him?

 

[Deleted member 105431]

A mortgage is supposed to be a loan secured on property, doesn't the agreement work both ways, one of the terms on a mortgage states that if you don't keep up your repayments your house can be repossessed,

if the lender goes belly up through their own mismanagement then they have broken the terms of the agreement. As long as the home owner keeps up the agreed payments on the mortgage how can his home be taken off him?

it's all in the small print. The house belongs to the bank until the final payment is made.

 

[JohnD]

As long as the home owner keeps up the agreed payments on the mortgage how can his home be taken off him?

Tosser is right.

 

[tim west]

Is the bank able to recall the loan in full payment immediately in those circumstances, forcing a sale of the property?

 

[Thermo]

no, it is an asset. if a bank or company went belly up, the official receiver would simply sell the asset (ie your mortgage debt) on to another company to recoup as much for the banks creditors as possible.

 

[tim west]

no, it is an asset. if a bank or company went belly up, the official receiver would simply sell the asset (ie your mortgage debt) on to another company to recoup as much for the banks creditors as possible.

do you mean the title deeds, rather than the debt itself?

 

[Thermo]

you will have a part ownership on the deeds, as you have paid some money towards the house, but the debt is what you have signed up to and that will be simply sold on to another bank. That is what the asset is, the debt is probably worth more than the house, taking into the account the life of the mortagage and the intrest payments that will come with it.

 

[Igorian]

Basically, you will have a new company looking after your mortgage and they will be bound by the contract you originally signed, including fixed terms. Usually a good deal for them anyway because they would have bought your contract for peanuts.

 

[Thermo]

exactly!

 

[Donkmeister]

I stand corrected, thankfully