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what me worry?
Posted: 01 July 2023 08:10:45(UTC)
#51

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If people hand back the keys to their house (as in the 80's) cos they can't afford the mortgage then the bank has a property which becomes an asset on their books and provided they have the correct levels of tier 2 in place they are sitting pretty. Or am I missing something?

My beef really is that no bank or building society gave any advice or guidance to mortgagees about the possibilities of interest rates going north and what the effect COULD be. And the BOE has been keeping interest rates criminally low for over 10 years, fueling the ridiculous house price boom. £500k for a 2 bed in the south east. Really???
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Taltunes on 01/07/2023(UTC), Phil 2 on 01/07/2023(UTC)
Ian Eccles
Posted: 01 July 2023 11:46:40(UTC)
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Following on from my last post.
Mark Twain said "history doesn't repeat itself but it does rhyme"
We have the saying "this time it's different"
Whatever your point of view, I have been looking back at my records and here are some prices taken from end of trade Friday 8th July 2011.
Barclays 251p
HL 629.5p
HSBC 624.5p
Lloyds 48.25p
RBS 38.375p (383.75p)
Standard Chartered 1653.5p

Aviva 437p
Prudential 732.5p
Standard Life 212p
Legal & General 123p

3I 292P
Alliance 391p
Brunner 428p
Caledonia 1780p
City of London 307p
Edinburgh 474p
F&C 328p
Lowland 954p
Mid Wynd 1258p
Monks 357p
Personal Assets 32723p
RIT 1328
Scottish Mortgage 779p
TR Property 201p
Witan 533p
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Phil 2 on 01/07/2023(UTC), what me worry? on 02/07/2023(UTC)
Busy doing nothing
Posted: 01 July 2023 14:33:40(UTC)
#52

Joined: 01/03/2021(UTC)
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what me, worry?;271745 wrote:
If people hand back the keys to their house (as in the 80's) cos they can't afford the mortgage then the bank has a property which becomes an asset on their books and provided they have the correct levels of tier 2 in place they are sitting pretty. Or am I missing something?

My beef really is that no bank or building society gave any advice or guidance to mortgagees about the possibilities of interest rates going north and what the effect COULD be. And the BOE has been keeping interest rates criminally low for over 10 years, fueling the ridiculous house price boom. £500k for a 2 bed in the south east. Really???

Banks didn't keep property on their books. Property's that were repossessed in the 1980's were sold off (auctioned) so that the lender(s) could get their money back. Many property's were sold far too cheaply (enter the start of BTL owners) the only remit was to cover the original borrowing's and costs associated to the banks/building society's with the previous owners receiving any funds remaining, of course they were black listed too so no chance of another mortgage in the foreseeable future. Whether this would be the same scenario these days remains to be seen.
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Keith Cobby on 01/07/2023(UTC), Phil 2 on 01/07/2023(UTC), what me worry? on 02/07/2023(UTC)
Thrugelmir
Posted: 01 July 2023 14:45:54(UTC)
#53

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what me, worry?;271745 wrote:

My beef really is that no bank or building society gave any advice or guidance to mortgagees about the possibilities of interest rates going north and what the effect COULD be.


Following the GFC there was a Mortgage Market Review conducted. One outcome was that lenders had to stress test borrowers against increased borrowing rates. Majority of lenders set this at 2% above their SVR. Also interest only mortgages became the exception. Paying down capital every month became the norm. Very different to the two decades that preceded the review.

While there will always be circumstances where people default. Lenders cannot be responsible for how people manage their personal finances. Mortgage comes high on the list of must pay.
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SSJ on 01/07/2023(UTC), Phil 2 on 01/07/2023(UTC), W.B on 03/07/2023(UTC)
what me worry?
Posted: 03 July 2023 08:46:40(UTC)
#54

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Thrugelmir;271797 wrote:
what me, worry?;271745 wrote:

My beef really is that no bank or building society gave any advice or guidance to mortgagees about the possibilities of interest rates going north and what the effect COULD be.


Following the GFC there was a Mortgage Market Review conducted. One outcome was that lenders had to stress test borrowers against increased borrowing rates. Majority of lenders set this at 2% above their SVR. Also interest only mortgages became the exception. Paying down capital every month became the norm. Very different to the two decades that preceded the review.

While there will always be circumstances where people default. Lenders cannot be responsible for how people manage their personal finances. Mortgage comes high on the list of must pay.


Sorry to disagree but that is not the experience we have had. All of our children and their friends got a mortgage without a problem, no questions asked. Most of them were on interest only until recently and, apart from 2 couples, none of them have paid off any of the capital. You are so right, mortgage lenders cannot be responsible for their customers finances, but the worst case scenario should be conveyed.
However, a basic education helps along with a grounding in simple economics. Stuff schools should be attending to (good old Martin Lewis is trying to do his bit), rather than the latest pronouns or concerns over self identification. You cannot, however, do much about the greed factor and the need for a deliveroo twice a week. But then, what do I know.
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4 users thanked what me worry? for this post.
Ian Eccles on 03/07/2023(UTC), Guest on 03/07/2023(UTC), Jimmy Page on 03/07/2023(UTC), SSJ on 03/07/2023(UTC)
Thrugelmir
Posted: 03 July 2023 09:29:25(UTC)
#55

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what me, worry?;271950 wrote:
Thrugelmir;271797 wrote:
what me, worry?;271745 wrote:

My beef really is that no bank or building society gave any advice or guidance to mortgagees about the possibilities of interest rates going north and what the effect COULD be.


Following the GFC there was a Mortgage Market Review conducted. One outcome was that lenders had to stress test borrowers against increased borrowing rates. Majority of lenders set this at 2% above their SVR. Also interest only mortgages became the exception. Paying down capital every month became the norm. Very different to the two decades that preceded the review.

While there will always be circumstances where people default. Lenders cannot be responsible for how people manage their personal finances. Mortgage comes high on the list of must pay.


Sorry to disagree but that is not the experience we have had.


If you borrowed before the GFC and had an interest only mortgage. Then you've had over a decade of falling interest rates to make inroads into the mortgage balance. July 2007 BOE base rate was 5.5%. Borrowing at over 6% was far from unusual. Returning to those days should come as no surprise.
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Newbie on 03/07/2023(UTC), what me worry? on 03/07/2023(UTC), W.B on 03/07/2023(UTC)
what me worry?
Posted: 03 July 2023 14:14:30(UTC)
#56

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Thrugelmir;271954 wrote:
what me, worry?;271950 wrote:
Thrugelmir;271797 wrote:
what me, worry?;271745 wrote:

My beef really is that no bank or building society gave any advice or guidance to mortgagees about the possibilities of interest rates going north and what the effect COULD be.


Following the GFC there was a Mortgage Market Review conducted. One outcome was that lenders had to stress test borrowers against increased borrowing rates. Majority of lenders set this at 2% above their SVR. Also interest only mortgages became the exception. Paying down capital every month became the norm. Very different to the two decades that preceded the review.

While there will always be circumstances where people default. Lenders cannot be responsible for how people manage their personal finances. Mortgage comes high on the list of must pay.


Sorry to disagree but that is not the experience we have had.


If you borrowed before the GFC and had an interest only mortgage. Then you've had over a decade of falling interest rates to make inroads into the mortgage balance. July 2007 BOE base rate was 5.5%. Borrowing at over 6% was far from unusual. Returning to those days should come as no surprise.



What a great topic for a pub discussion! We could include areas such as why the BOE kept the interest rate falsely low for 8+ years, why lenders didn't inform their customers that rates could go back up to 6% plus at some point in the future (and what that might mean to repayments), why Carney and Bailey backed/encouraged the housing bubble etc. etc.

However as this thread is about the banks themselves, they must be coining it in at the moment with interest rates moving up but interest rates going nowhere. BUY!

NB. My own mortgage interest rate reached a peak of 15%. Those were the days.
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ANDREW FOSTER
Posted: 03 July 2023 14:46:08(UTC)
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what me, worry?;271994 wrote:


However as this thread is about the banks themselves, they must be coining it in at the moment with interest rates moving up but interest rates going nowhere. BUY!

.


They may be coining it in right now, but repossessions eventually catch up and they have a bunch of assets falling in value and potentially threatening LTV thresholds. Plus a load of businesses liquidating and going bust.

As for banks being a "BUY", I'd look back at the last time there was a massive house price crash, and how the banks coped. Lloyds, RBS, Northern Rock etc.

Barge pole territory for me....
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Sara G on 03/07/2023(UTC), what me worry? on 03/07/2023(UTC)
what me worry?
Posted: 03 July 2023 16:07:24(UTC)
#59

Joined: 20/11/2007(UTC)
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ANDREW FOSTER;271998 wrote:
what me, worry?;271994 wrote:


However as this thread is about the banks themselves, they must be coining it in at the moment with interest rates moving up but interest rates going nowhere. BUY!

.


They may be coining it in right now, but repossessions eventually catch up and they have a bunch of assets falling in value and potentially threatening LTV thresholds. Plus a load of businesses liquidating and going bust.

As for banks being a "BUY", I'd look back at the last time there was a massive house price crash, and how the banks coped. Lloyds, RBS, Northern Rock etc.

Barge pole territory for me....



I think that had something to do with the "junk" pass the parcel packages, stuffed with merde, that were whizzing round the globe, and when the music stops.......
Although I would agree with you, banks are a risky venture to be involved with at any time. The long short, great film if you haven't seen it.
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Phil 2
Posted: 26 July 2023 09:40:08(UTC)
#61

Joined: 20/07/2018(UTC)
Posts: 2,107
Well it’s results week once again, so an overwhelming sense of déja vu … Lloyds and NWG down 3% today, mostly down to Lloyds’ results and the resignation of Alison “here’s my PIN, I wrote it on my bank card” Rose.

Will NWG tumble further on its own results day later this week (hint: it usually does) ?
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