Nic Cicutti, 12-12-07, 10:22 am - Drumster, two quick points:

“1) I saw some statistics from the CML suggesting that 69% of borrowers - and re-mortgagers - were taking out fixed mortgages until very recently, when prices for such deals started to rocket in the wake of the credit crunch. I'm not exactly sure how many have 32" widescreen tellies, 4X4s or take expensive holidays. But I'd be willing to bet the vast majority of people likely to be facing financial difficulties are not as you describe them.”

 “Do you fancy going on holiday, paying off some of your debts in order to help your monthly finances or even some home improvements? A secured loan can be used for any purpose and is a loan that helps to release some or all of the equity tied up in your property.” *  Welcome Finance Secured Loans

“You can use a FIRSTPLUS loan for almost any purpose such as paying off your outstanding credit (e.g. credit cards or personal loans), using the money for a major project, such as replacing your kitchen or perhaps buying a car.” *

“Any Purpose Secured Loans: Debt consolidation, Home Improvement, A new car, That special holiday, A new kitchen, any reasonable purpose.” *  Ocean Finance & Mortgages.

*None of the listed suggestions for the loan’s use are either for capital purposes or to improve the value of the home. (a senior estate agent confirmed that to me that even a properly constructed brick extension is not guaranteed to add value to a home).

Therefore the loan is a helping hand into an impoverished retirement for many twenty first century folk who do nothing in moderation when it comes to money.

Any chance of a reply to my thread Nic – 12-12-07, 10:52 am? drumster.

Dear RED ARMY

LMAO.you tell him drumster.

Few simple reasons as to why its all threes parties the government regulatory bodies, the finance companys and the consumer that its responsible for this sorry debt and credit crunch mess.

1)-the us sub prime market,mainly the market where you get morgages and loans regardless credit history,i may be wrong here but i heard lot of the problems in america were because a lot of banks gave loans to the unemployed,this is exactley why the uk hasnt been as badley affected YET because the likes of halifax dont give loans to the unemployed,thats what the dss crisis loans are for.

2)-the fsa,uk goverment and bank of england...blame these fools for not paying attention to what was stariing at them in the face,they should have clamped down on irresponsible lending ,they should have set a limit on the number of credit cand store cards people can have to something like 5,i can assure you some people have a endless number.

3)-the consumer,the biggest loser and fool in all of this,the banks and the government will survive all of this as they always do,but i reckon 2008 will be the year when the consumer realises (too late though)that they have been the fools in all this,taking advantage of all the loans andd credit cards,lots more will go into bankruptcy and lots more will have homes repossesed.

A few simple proposals to solve all of this

1)-a maxmium limit of 4-5 credit cards per person

2)  a maxmium credit card limit of £5000 and £2000 for the ones who are under the average wage earnings.

3)- the fsa should fine the backside off companys or withdraw their credit licences to ones who have been repeatedly lending iressponsilby maybe knowing that certain debts could never be fully repaid,for example their have been documentrays previously about people who have killed themselves over debts because of banks and lenders who have lent big money or issued high limit credit cards to people knowing full well that the customer didnt have the wages required to make full repayments once they maxed out.

4)once you are declared bankrupt you should be permantley banned from ever getting a morgage again.

5)- ALL CREDIT DATA should be on one database with free access to all who need it and consumers shouldnt have to pay to check their own history.

6)-id nationalise the unsecured lending market that way we can hold the government to account over blantant failures .

7)- me and landshark to run the country..lol

apart from the last point one take all the others as gospel.

they are just a few ideas (i cant go on all day)which are ethier proposals or laws which should be strictly enforced.

if anyone else has ideas(cos the government doesnt)on how to solve it then please feel free to add.

Hi twenty first century man. My friend who was a dyed in the wool cockney used to say in this sort of situation ARE YOU SURE?!!! I certainly don't agree with you and the FSA. I certainly do think I should have heeded that nagging feeling before I clicked 'post' and clarified... "through no fault of their own have fallen on hard times..."

Any reasonable person can only interpret that one way namely sickness or losing your job and related problems.

And as to only a small proportion getting secured loans to use as income. Nic, Nic, Nic pulleth thee other one. Sorry, sorry I didn't mean that let's have a whip round for MS and ooh Carol Vorderman. What er... sort of er... volume does MS do on er... secured loans Nic? Enough to keep a fair sized Banana Republic in funds for say ten years... Now why does the number ten ring a bell? Dunno but it'll come to me.

I notice you neatly sidestepped my CML 'punters' thread.

And finally ladies and gentlemen, Nic is Editor of moneysupermarket. And Nic is of an age when he likes to parody old song titles. Today it's Eadie Gorme's "It's My Party and I'll Cry If I Want To" Go on Nic don't be shy.

drumster:

There is a world of difference between sympathetically treating mortgagees who through no fault of their own have fallen on hard times and the good folk who took ‘fixed’ deals because they thought they were attractive. Also the ‘fixed’ folk... Come on Nic and Landshark wanna have a bet on how few of them haven’t got secured loans because, and here it comes again chaps, they needed a holiday, 4x4 and a TV that can double as a ‘screen’ in one of the cinemas in a multiplex? All this approach is, is a quick fix which will put off the evil day for a while, which will then be that much more evil. People need a short sharp shock otherwise ultimately, referring to my post you didn’t disagree with SHARK!, they can look forward to a penurious retirement.

Northern Rock is an entirely different situation because that affected UK plc on so many different levels. The staggering incompetence of the FSA, Bank of Egland (if we never agree about anything ever again SHARK! SNAP!! on The Bank of England – in brief just an international PR stunt and GB can blame them when the going gets tough), PM was only to be expected. As the hours ticked by these good folk who always do everything by committee and never stand on their own two feet were way out of their depth. Talking about damage that incompetence made the ‘fixers’ situation look like someone running up a tab in the Rovers Return and needing time partially to default. A decision should have been made at least two months before on a plan of action and that plan should have been to sort it out in a ‘smoke filled room’ – sometimes that’s the only way.

And repetitively, until the majority of good folk in this country realise that when they have a £100,000 mortgage and a life policy matures giving them £20,000 that they are only £80,000 in debt and don’t have savings of £20,000 there is little hope of this country having a sound future. Nic you may have the details at your finger tips which show that in the whole of Europe at least that we are the most personally indebted nation.

UK plc, a fool’s paradise!

Drumster, two quick points:

1) I saw some statistics from the CML suggesting that 69% of borrowers - and re-mortgagers - were taking out fixed mortgages until very recently, when prices for such deals started to rocket in the wake of the credit crunch. I'm not exactly sure how many have 32" widescreen tellies, 4X4s or take expensive holidays. But I'd be willing to bet the vast majority of people likely to be facing financial difficulties are not as you describe them.

You make an interesting distinction between NOT looking after borrowers, most of whom have done nothing wrong, and Northernh Rock savers, who also have doine nothing wrong. That's fine by me - as long as you accept that the consequence of letting either of them drown would be a collapse in the UK's economic and financial system that would affect not just the small minority of feckless people you dislike so much but also the vast majority of us who are blameless.

2) The FSA is indeed calling on lenders to treat sympathetically boroowers who may find themselves in financial difficulties - not to wipe off their debts or anything like that. I encourage you to click through to the FSA's website and read the speech I was quoting. It seems as if, despite yourself, you agree with them and myself.

The speech can be found here: http://www.fsa.gov.uk/pages/Library/Communication/Speeches/2007/1204_cb.shtml

 I call that prrogress (LOL)

12/12/2007   00:37 Telegraph.co.uk. Please read this and the article/s related to mortgage lending for balance.

"Cameron urges lenders to ease motgage pain" - I suggest David Cameron, Leader of the Oppositon, has no choice but to adopt this position.

The CAB has done a survey which effectively says many lenders have been irresponsible.

MY favourite extract is this one from The Council of Mortgage Lenders - for those that don't know 'punt' means gamble.

"The CML said there was also a move away from the previously favoured fixed-rate mortgage, to variable-rate loans, as people took a punt on the Bank of England cutting interest rates."

i trust that if this 'punt' goes wrong the evil lenders will refund the 'punters'. That's what they do in the bookies when the favourite 'Wonderboy' comes in second isn't it?

There is a world of difference between sympathetically treating mortgagees who through no fault of their own have fallen on hard times and the good folk who took ‘fixed’ deals because they thought they were attractive. Also the ‘fixed’ folk... Come on Nic and Landshark wanna have a bet on how few of them haven’t got secured loans because, and here it comes again chaps, they needed a holiday, 4x4 and a TV that can double as a ‘screen’ in one of the cinemas in a multiplex? All this approach is, is a quick fix which will put off the evil day for a while, which will then be that much more evil. People need a short sharp shock otherwise ultimately, referring to my post you didn’t disagree with SHARK!, they can look forward to a penurious retirement.

Northern Rock is an entirely different situation because that affected UK plc on so many different levels. The staggering incompetence of the FSA, Bank of Egland (if we never agree about anything ever again SHARK! SNAP!! on The Bank of England – in brief just an international PR stunt and GB can blame them when the going gets tough), PM was only to be expected. As the hours ticked by these good folk who always do everything by committee and never stand on their own two feet were way out of their depth. Talking about damage that incompetence made the ‘fixers’ situation look like someone running up a tab in the Rovers Return and needing time partially to default. A decision should have been made at least two months before on a plan of action and that plan should have been to sort it out in a ‘smoke filled room’ – sometimes that’s the only way.

And repetitively, until the majority of good folk in this country realise that when they have a £100,000 mortgage and a life policy matures giving them £20,000 that they are only £80,000 in debt and don’t have savings of £20,000 there is little hope of this country having a sound future. Nic you may have the details at your finger tips which show that in the whole of Europe at least that we are the most personally indebted nation.

UK plc, a fool’s paradise!

I was going to stay out of this but I am seeing first hand the effects of this on ordinary people in my office.

If it was just a case of the sub-prime market being hit, then it could be viewed as a "shake up" that needed to happen, but it is a combination of things that is causing the greater misery. If you take into account the wholly unreasonable costs of fuel as well as mortgage repayments, the man-on-the-street is simply being pounded into financial penury by what can only be described as fiscal mismanagement from the top.

With mortgage repayments typically rising by between £250 and £350 per month for people coming off fixed rate loans, this represents a massive hike in the monthly bills for people with mortgages of between £180k and £250k. Add to this your typical fuel bills for getting to/from work which will also have risen WAY beyond inflation and the average household is facing static increases to outgoings of between £400 and £600 per month.

If you were sensible and used the 1/3rd rule for mortgage/living/savings when you calculated your "ability to pay" then you are still facing a massive hike which you could not have planned for and it is this that needs to be addressed. It is the government who sets the interest rates (don't be fooled into thinking that the B of E is actually autonomous) and it is this that frightens me as I can see a repetition of 1989 - 1991 lurking in the shallows. Estate agents have been responsible for the hikes in property prices that has forced mortgage lending into dangerous realms and people to stretch their budgets to satisfy the greed. Now, the US economy sneezes and the UK gets flu ... nothing new there then, except that we may end up paying far more than anyone in the US ever will.

This will get messy as the government hasn't the first clue about sorting this out because it is banks in the US who are manipulating OUR economy. We'll pay for their mistakes - we always do.

SHARK!
 

Drumster, I'm flattered you are flattered (LOL)

More seriously, in terms of people who borrowed, I think we have to accept these are fairly unusual circumstances and many of those who may find themselves in difficulties are not the kind of feckless people you seem to imply they are. I take on board your comments about unfettered borrowing, but that's not the issue here.

No-one is talking about bailing out buyers in difficulties, more that lenders shouldn't jump down their throats the first minute they find themselves in difficulties over payments. There are many ways of doing this, including extending the mortgage term, moving to an interest-only payment for a period of time and so on. No-one loses out that way, least of all you.

Finally, you may want to "bring it on", but I suspect that most other homeowners would rather have an orderly and stable system that doesn't harm them or those in difficulties, while still ensuring all mortgage debts are eventually paid in full by everyone.

As a side note, if we applied the same "laissez-faire" logic to Northern Rock, but this time to savers, it would have been perfectly acceptable to allow the bank to go under, hundreds of thousands of elderly savers to lose their money and a systemic banking crash that would have affected every other savings account in the UK.

That can't be right, surely?

First I would like to say how flattered I am that the Editor…  (shut up and get on with it – Ed)…   Er… ok, many good folk have a fear of going to the doctor if they think they have symptoms of a serious illness. When they eventually go some of them hear the words, “if only you’d come earlier”.

This country cannot go on living in a fool’s paradise where people drowning in debt think that if they get more debt that will get them out of debt. They cannot continue with an attitude of mind to money which at its worst is showcased with someone wanting a consolidation loan, without regard to cost, to reduce the number of direct debit payments from a handful to one. To bail out the ‘fixed termers’ is once again sending out entirely the wrong message to people. Don’t take responsibility for your actions and you will be bailed out. Maybe there should be an exam you have to pass before you are allowed a mortgage.

Question  What is the first thing you do before you take out a fixed mortgage?

1         Make sure you’ve got a pen that works?

or

2         Make sure that you can cope with the repayments once the fixed period is over even if it means not taking out a thumping great secured loan asap for essentials such as a holiday, 4x4 and telly that requires taking doors off hinges to get it in?

And the results are in and… it’s 100% failure.

if you do the short term fix now nothing changes. If you take the pain and pull the plug two things may happen, the profligate borrowers may come to their senses and realise there are consequences to their actions and we may finally see what has really kept this country booming for ten years and repair it properly over the painful long term and not quick fix it.

And penultimately, spare a thought for the prudent core of the country who have been sidelined by the “consolidate please, I can’t sleep at night with these five direct debit payments at different times of the month”.

Finally Nic, just to confirm “I suspect neither are scenarios that drumster would want to see” – Bring it on (as another member is wont to say). If I go down there won’t be anything left of the country. Mellowing it out a bit I live my life the way my grandfather did, if he wanted something he saved for it and when he had every single penny in front of him he went and bought a gramophone, a TV, a new bed.

I'd actually like to go back to the original subsance of dumster's argument, if I may.

The danger with his comment is that he might actually end up saddling borrowers, including himself, with more problems not less.

The sad fact is that if lenders don't adop a careful attitude towards borrowers who might find themselves in difficulties when they come to the end of their cheap rates, more defaults and repossessions are likely. As a result, two things might well happen: the first is that the lender risks losing money. If that happens, it will push prices for everyone else to recoup its profits. The second is that house prices will fall as confidence in the property market collapses and we go back to an early 1990s-style situation where 250,000 people lost their homes.

I suspect neither are scenarios that drumster would want to see. That being the case, some judicious and targeted advice might well come in useful. That's what the FSA wants lenders to offer....

Loosely translated meaning I know I'm in the wrong and I'm not goin to fool him but at least other members may not realise that. I've got news for you unless it's directly relevant to their situation other members have little interest in these sort of exchanges so you can stop playing to the non existent gallery. You're not a fool but you're making a fool of yourself in front of me. I imagine you'd rather swim the channel with a gas stove on your back than do that, but you're doing it anyway. 

Dear drumster

As you know I am nobody’s fool and I wear my heart on my sleeve. I use the Forum primarily to vent my spleen on the world in general, which I am unimpressed with. That’s why I rush round the Forum like a contestant on Dale Winton’s “Supermarket Sweep” with about the same attention to detail of the average contestant. I am better than that but mostly as I have no regard for the vast majority of members I couldn’t care less what members think of me. I ‘played nicely’ with you as you put it around the time of your ‘best coffee ever!’ post but mostly you really get up my nose. You’re patronising, think you’re better than everybody else and smug!... Just like me really but you ‘mean well’ and you do get your facts right… Mostly! Actually to spite you and so that I can attack members more effectively I’m going to start getting my facts right!

In closing I’d just like to say that I er… really er… do dis-like you!!!

 shiverkitten