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Archive for House repossession

Credit Crunch – Hope at last

Monday, September 8th, 2008

In surprise news this morning, the US government has announced that it will bail out America’s two largest lenders, Fannie Mae and Freddie Mac.

Whilst this may seem far removed from the daily grind of most people’s lives, the effect of this action will have far-reaching implications around the globe and already has seen a positive affect on global stock markets.

Most UK homeowners will have never heard of either company, but together they are the largest holders of home loans in the world and as the saying goes, ‘when America sneezes, the rest of the world catches a cold’. In the last year they had been suffering unsustainable losses, as the American home loans market went into freefall and this was a large part of the credit crunch being felt by all.

Once confidence was lost in America, Asian backers stopped investing funds and the resulting lack of liquidity on the loans market has meant that everything from business loans to small personal loans has been affected by a lack of funds to be lent.

With this move – long overdue according to finance pundits – investment into America is likely to restart from healthier financial markets which experts hope will begin to halt the recession which is threatening to sweep the world.

What does this mean to the average borrower? Well, funds are unlikely to rush into the market instantly, but finance is a fast moving beast and so hopes are high that relief will be imminent for Western business and individuals. Particularly in America where an estimated 9% of homeowners are behind in loan repayments, risking repossession, bankruptcy and long term bad credit.

Posted in Bad Credit, Banking, Bankruptcy, Borrowing, Consumer Credit, Consumer debt, Financial news, Homeowner Loans, Homeowners, House repossession, Housing news, Missed payments, mortgages, Personal debt, Personal loans, Property, Secured loans, UK Finance, Unsecured loans | No Comments »

Bad Credit Home Loan Woes

Thursday, August 28th, 2008

An increasing number of households owned on bad credit mortgages are facing repossession as they make late loan repayments.

According to figures out from Standard & Poor, nearly a quarter of all bad credit home loans are now in arrears – many by as much as 90 days. This is up from 22% in the last quarter surveyed and now officially at a record level.

Comparison website Moneysupermarket have commented that this situation is of course attributable to the credit crunch, as nearly all homeowners have been faced with increased interest rates. For families who were already on a higher than average rate, a price rise can make it impossible for repayments to be met.

Additionally, the tighter lender criteria now in place across the loans market has made it nearly impossible for families to find cheap loans when a fixed rate deal comes to an end.

With fewer loan products on the market and many lenders pulling out of the sub-prime loans market, borrowers are having real difficulty in finding a bad credit loan at a price they can afford.

With reports on an increasing number of repossessions taking place and uncertainty in the jobs market, UK debt charties are bracing themselves for floods of enquiries. As colder weather sets in and fuel requirements rise, more families are likely to be plunged into the cyle of bad debt.

Posted in Bad Credit, Borrowing, Consumer Credit, Consumer debt, Debt Consolidation, Debt management, Financial news, Financial products, Homeowner Loans, Homeowners, House repossession, Housing news, Missed payments, mortgages, Personal loans, Property, Remortgaging, Secured loans, UK Finance, Unsecured loans | 1 Comment »

Fall in number of insolvencies and repossession

Friday, April 11th, 2008

Despite a large number of warnings that repossessions and insolvencies were on the rise as a result of higher interest rates and the fallout from the credit crunch, recently published figures actually show that the exact opposite has happened.

The figures which were released by the Insolvency Service show that 26,072 people were declared insolvent in the three months after the credit crunch hit. This is a fall of 3% on the number of insolvencies in the previous quarter and a fall of 5% of the same period the previous year.

While the number of bankruptcies had increased by 2.2% on 2006 to a total of 15,833, the number of individual voluntary arrangements (IVAs) was actually down by 14.3% to 10,239. The large drop in IVAs, which allow borrowers to write off some of their debt in return for creating a payment schedule with creditors, could be explained by the fact that most lenders dislike the schemes since they are then forced to write off bad debts. With banks needing to claw back as much money as they can, they are refusing to allow personal loan and credit card customers to ‘go bad’.

While it is not clear which lenders were behind the majority of rejections for IVAs it is believed that Northern Rock is on of the main contributors rejecting all applications for IVAs. This is unsurprising, given its recent history.

HSBC has also changed its policy to IVAs. In the past, repayments for IVAs came in somewhere around 25p for every £1 owed to the lender. HSBC has now upped its threshold to 40p for every £1 borrowed.

As a result of these changes borrowers are now more likely to enter into debt management plans with their creditors.

Posted in Bad Credit, Bankruptcy, Borrowing, Consumer Credit, Consumer debt, Credit Card, Debt management, Financial news, House repossession, Housing news, Insolvency, Missed payments, mortgages, Personal debt, Property, Secured loans, UK Finance, Unsecured loans | No Comments »

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