Startling Facts

[Welsh Boy]

I read with interest today that first time buyers are going to be able to borrow up to 6 times their salary to take on mortgage funding. Looking up some debt facts I have just found that CAB have average client debt of £13,000 and say on average it will take CAB clients 77 years to pay back the debt. It also goes on to say British couples find money the most difficult subject to talk about, and with the pension dilemma there seems to be some very stormy times ahead. The average interest rate on credit cards are 17.09% and apparently the price of an average property increases by £41 per day.With all of this in mind and a possible ticking time financially it was quite a suprise to find that Banks & Financial institutions sent out 1.26 billion items of junk mail trying to entice us to undertake new borrowing. Maybe a weekly tv programme to educate us all would be a good thing. When you consider how hard we work to provide ourselves with an income learning how to utilise our money to our best advantage should be of paramount importance. Tony

[Skippy]

It's a scary situation. I was in an IVA from October 2006 to February 2007 and I am now bankrupt but I still keep getting letters offering me credit. I think that children should be taught how to manage their money while they are at school, and I think the TV programme would be a good thing - if you need a presenter...

Onwards and upwards!!!

View my blog at http://skippy13.blogs.iva.co.uk/

[Adam Davies]

Tony
I think the housing "boom" is covering some major debt problems and if,or when,the market drops then insolvency will rise dramatically.
Regards

Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

View my profile here:
http://www.iva.co.uk/andy_davie_profile.asp

[MelanieGiles]

Tony

Some very interesting facts there, for which I thank you. I remain of the opinion that the consumer debt problem is only a minor one, taking the economy as a whole, however there are some alarming lending practices starting to emerge which the general public ought to be made aware and beware of. You have already highlighted this with the growing use of secured loans. There are some very well know television presenters who ought to be ashamed of themselves for promoting such products!

And Andy is right about the housing market - and don't forget the base rate increase we are also promised over the next few weeks.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[thebear29uk]

Hi Tony

We talked about this on the phone today and I completely agree with you and all the other comments here. As I said to you earlier companies like Picture and FirstPlus (is that the Carol Vorderman one?)are constantly on our screens during the day advertising secured loans. These are always portrayed as a way to clear your existing debts by securing them against your property. All fair enough until the amount offered is 120% or more LTV.

Unfortunately the vunerable amongst us at their wits end with being dragged down by debt see this as a lifeline and snatch it with both hands. The reality would be to contact a Mortgage broker to see if its feasible to borrow against the equity in your property.

I said last week that although the interest rates were held this month everybody expects a rise next month and further ones after that. One senior economist was quoted on the BBC website as saying the only way to halt the unsustainable property price rises was to put interest up to 8% or more. Boom and bust maybe? I feel that there are a large number of people going to be pushed over the edge financially and into insolvency by an interest rate 0.5% higher than its current level. What constant increases in property values gives us are people who think they are better off than they are. Buy to let is fine until the property sits empty and 2 or more mortgage payments still have to be paid each month.

Like Melanie says some TV presenters should know better but then when a top sportsman like Gary Lineker promotes crisps who is to say where these people draw the line on what is morally right.

But to summarise I guess we are back to the old topic of irresponsible lending versus irresponsible borrowing.

Would love to stay and chat but need to go and water the money tree at the bottom of my garden.

Best wishes

Dave

[Skippy]

Can I have a cutting from the money tree Dave?!?!

I also read about putting mortgage rates up to 8%, and someone else suggested 10% - if they do that there are going to be a lot of people losing their homes. I know a lot of the financial experts (not ones on this forum) say that you shouldn't borrow more than you can afford, but surely they have to take into account the fact that people's circumstances change. When Dave took out his mortgage nearly 6 years ago he was working for a company in a reasonably well paid job. Natwest lent him 3.5 times his salary and he bought a modest (a polite way of saying poky!) one bedroom flat. 6 months after the mortgage was agreed he was made redundant. totally unexpectedly. He is now self employed and earning a lot less (although much, much happier!) so each month is a struggle (another reason I needed to sort out my problems!). How is putting up the mortgage rate to 8 or 10% going to help us, and the many other people in our situation?

Sorry, that wasn't supposed to sound like a moan, and I do appreciate that something has to be done, but surely there must be a way that they can curb borrowing without hitting people already struggling?

Onwards and upwards!!!

View my blog at http://skippy13.blogs.iva.co.uk/

[Welsh Boy]

I agree with the comments written and I don`t wish to sound like a doom merchant but I honestly think we are seeing the tip of the iceberg I think the real problems are just stsrting to emerge. -Tony

[Skippy]

Tony, I'm going to suggest that Dave contacts you when the fixed rate ends in October this year. Natwest are happy to keep offering him deals on the mortgage as it always gets paid, but he cannot shop around for another lender as he doesn't earn enough to get the mortgage from a high street lender, and obviously I'm no help whatsoever! I don't know if you would be able to help, but it's worth a try. Now whether or not he will phone you is another matter - I've planted the idea in his head, so hopefully by September / October he will think it's his idea, and therefore will do it![;)]

Onwards and upwards!!!

View my blog at http://skippy13.blogs.iva.co.uk/

[Adam Davies]

Hi
Saw Carol Vorderman on "have I got news for you" the other night[may have been a sky channel]and she was getting ribbed about her adverts for First plus and she stated that First Plus had never repossesed a house !!! Bold statement,I guess that with rising house prices they just sit tight and add charges to the loan until the first charge mortgage company actually starts repossesion action.
Regards

Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

View my profile here:
http://www.iva.co.uk/andy_davie_profile.asp

[DebtDummy]

Welshboy, on the day I petitioned for bankruptcy there were at least 30 home repossession cases listed on the board.I was stunned as I didn't think that market was so lively for lack of a better word at the moment. Most were lenders I have never heard of for example Kensington.

I was able to overhear conversations between homeowner and mortgage lender representative. This too boggled my mind to hear,'' Well, yes, but that £100 a month is not enough per month. I can tell the judge you'll be able to pay your arrears....include the extra amount.'' Welshboy, is that type of added pressure in a court of law just plain wrong? I mean, clearly, the couple were already distraught and to be told that worsened the situation?

Anyway, I am curious about the actual amount of home repossessions in England granted to mortgage lenders per day.

All I have left is my humour.

[Storm]

http://www.creditaction.org.uk/debtstats.htm

The conduct of solictors in these hearings can be quite bad..... normally they have only recieved the papers by fax hours before and are tasked with getting the max out of people.

A district judge is normally quite reasonable but often people turn up scared and accept whatever is said.

[Welsh Boy]

Debt Dummy

Sorry I couldn`t make out what you are asking me, the actual figures for repossessions is something that I am not aware of and also I don`t know what goes on in court. Howvever I do know that all lenders have to adhere to the same set of rules so the situation for the clients would be exactly the same regardless of whatever lender they are with if it has come as far as a court hearing. Sorry I can`t be of anymore help.-Tony

[Storm]

During the third quarter of 2006, 34,626 mortgage possession actions were initiated by banks and other lenders which equates to about 532 per day.

(Before somebody mentions my math its based on 65 court working days per Qtr)

[Dominic]

When the housing bubble bursts i fear a lot of people will e in trouble.