House repossessions

[shomer42]

Is it the fault of the borrower or the lender or no ones fault?

[shomer42]

I was asking if anyone thought that the lender may be at fault....but since you ask, Panoram the other evening was on. It said lenders are lending too much for people to repay because the agent gets a commission.

[Sasha13]

I would imagine shomer42 means lenders who lend irresponsibly, i.e. 6 (or more) times a persons salary.

[vehelpfulguy]

It could be the borrower or the lender.

Maybe the borrower lied about their salary and could not afford to make the repayments. Or maybe they spent the money on a new car or holiday and chose not to pay the monthly repayments.

Of course maybe the lender gave them 10 times their salary and saddled them with a huge mortgage they could never repay. Or maybe the lender encouraged them to lie about their salary or bonuses or overtime so they could get a bigger mortgage.

Or maybe it was no ones fault. Maybe the person got made redundant and could not afford the repayments, or maybe they were self employed, but broke their leg and could not work.

Or maybe a couple split up and the single person left in the house could not afford the mortgage.

There are all sorts of reasons why a house can be repossessed, and it could be the borrower, lender or nobodys fault.

[jake-the-peg]

Really?

I hear the distinctive tones of over-simplistic thinking.

And I suppose it's never the fault of the con artist when someone gets swindled?

I'm not suggesting that banks swindle people, although others may disagree. But with widespread home ownership you have an awful lot of people getting mortgages who are not financially acute.

These people often trust mortgage advisors and can be badly misled.

[kwicky]

I knew someone who couldn't keep up his mortgage payments. He could not sell his house in the depression. He handed in his keys but when sold at auction fetched far below the mortgage. If he had stayed there the house would have been repossessed. The fault lay with him for not keeping up the payments. The mortgage indemnity he had to pay for at the outset protected the building society but not him. The insurance company bared the loss but they employ agents to track the defaulter down to recover some money.

[dolly pond]

ouch! me being an estate agent (a nice one, so please no nasty comments) comes across loads of repo`s, one this week is a classic example....

Mr Z from Birmingham has a lovely home and we value it back in february for �240,000 to sell it in a reasonable period of time. he fails to tell us hes in the sh**t with his lender and ups his price to �270,000!!! i got him an offer of �250,000 2 months ago which he rejected!!!! fool we scream, and we know it will NEVER value up at survey for anymore than �240,000 having done our comparable evidence!!!

if he had accepted, he would have completed.

he got repossessed last week. his lovely home is no longer, he has wrecked it, removed ALL the fittings and down valued it to �200,000. he is a big ��loser as he can now only got the dodgiest mortgage ever.

the moral of the story is:

if u cant pay your mortgage, contact your lender and sell up, at least u save yourself the stress of losing completely.

only one person told me that they were being kicked out, so i sold it that day for them and they moved 4 weeks later

xxxxxxx

[Ethel]

The only reason for repossession is negative equity - if the house can be sold at a price to cover the mortgage, repossession should never happen.

Negative equity typically occurs where there has been a 100% ( or even 110% mortgage) and the house prices has subsequently dropped.

90% should be the maximum mortgage. It won't stop it, but will help.

[Pippa68]

I agree wtih Ethel.

There are also some other points. In most cases a first time buyer will have to borrow far more than they can really afford due to the property prices. I would say that in a lot of these cases it probably could be afforded if lifestyle changes were put in place...so many people want to carry on with the holidays, designer clothes, takeaways etc.

Of course I know this isn't the case for all. Mr Pippa had to have his first property repossessed due to his divorce costs and the fact that his ex wife was able to default on her payment terms. His flat was in negative equity and his mortgage payment was almost as much as his monthly salary.

When we first bought our house we cut right back, and for three years we lived on the bare minimum. People are living in the 'buy now, pay later' culture and everything material is at hand for a person to get on credit terms.

[dolly pond]

people lose their houses cos they dont pay the mortgage!! simple as really

if they are stupid enough to hide from it and stop paying, why shouldnt the lender take back the house? tough i scream