Credit Crunch Mortgage Holiday

[oldguy]

Lets get this straight, I’m all for supporting the owner occupier that has been dealt a cack hand despite being a honest, hard working bloke/blokess.

I’m just a bit pied that it looks like a lot of us simple, tax paying folk are going to be bailing out even more people that over committed themselves through greed. And that’s after we have bailed out the cray bankers.

[Kevsta]

74niner (04/12/2008)

What deeply unpleasant people you are.

Not everybody borrowed huge multiples on self-certified, 125% mortgages. And, not everybody treats their house as just another ladder on the housing market ladder, for some it’s their home for the next ten years or more.

True it is tragic, but it is life. Not everyone can afford a mortgage and it is a huge risk. With any risk you make the decision to take that risk no else is making it for you. I have had the chance a couple of times in the last 6 or 7 years to buy but I deemed the risk to high and continued renting.

Here’s a friend of mine’s story:

Finally she got a well paid permanent job and decided to buy something of her own, out of town. Her mortgage was three times her annual salary, with a 10% deposit. It was well within her capabilities to pay, leaving plenty for other expenses and savings. However, a month after she moved in, she was unfairly dismissed from her job, and got no redundancy. Nor did she get the jobseekers allowance, as according to the job centre, she could sue the company. She couldn’t, though, as she’d been there less than a year.

Your not entitled to any redundancy until you have been with a company for two years. And within the first year a company can get rid of you quite easily for almost any reason. However if you have been unfairly dismissed you can take your employer to an industrial tribunal. The reason that you friend couldn’t get JSA is because it is for people who have been made redundant, or lost their job because the company went bankrupt. If you are sacked or quit you cannot receive it.

The mortgage payment protection didn’t kick in, as she lost her job less than the three months required by her policy after signing up for it. She’s managed to pick up some temp work over the year, but not enough to pay the mortgage, and ended up overdrawn.

She loves her flat, has made it her home and for the first time in years feels settled and free of the depression that had plagued her for over ten years. She’s now one month in arrears with her mortgage, as the bank finally cut the overdraft, and with nothing left to sell and nobody to lend her money, she’s extremely worried and back on medication for the depression to keep her going from one day to the next.

In her line of work, it’ll get busier in Jan/Feb, but by then she’ll be 3-4 months behind with her mortgage, let alone any other bills, so she doesn’t know how she’ll cope until then and if her building society will let her keep the place or start repossessing it. Missing payments also affects her credit rating, which needs to be a good one for her to pass the necessary credit checks for work, so this is another worry.

People like that need help. If she loses her house, the government will have to pay her housing benefit to cover the rent, or she’ll end up homeless, which is hardly of benefit to the nation as a whole. It’s surely much better to keep people in their homes and allow them to ride the difficult times. This interest is only deferred anyway, whatever she’ll get from the government, she’s expected to pay back, and she’s happy to do that; anything to allow her to keep her home.

Yes it is sad, and very stressful for her, but there are plenty of other people are in the same boat. There are plenty of people who lied on the mortgage application. There are plenty of people who didn’t and instead of putting money aside if so if they were made redundant they and there house would be safe, but instead they have spend it on multiple foreign holidays, 42" plasma TV’s, new cars every year.

[Benelli_Boy]

Giuliano (04/12/2008)

It is hardly get out of jail free. The unpaid money still has to be paid by the home buyer eventually.

That’s not the way it’s being reported. I’ve seen it in two places saying that if the bank don’t get their money back then the govt makes good their loss.

[andrew_7]

74niner, my sympathies to your friend - as I said this recession will take down good honest people through no fault of their own. People very close to me have already suffered potential job losses, I’m earning next to nowt at the moment, and I would love to see the government step in with redundancy packages to cover those first two years when the employer doesn’t.

My irritation is that the government, and not just this hapless one, seems to focus purely on homeowners or immigrants when it comes to handing out charity. I’m not gonna debate whether these latest concessions are actually any use, they are meant to be and that’s enough.

Cutting interest rates hurts those who have saved and helps those who’ve borrowed. And people worry that we are becoming a nation surviving on credit? Seems the government is leading by example.