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Banks act to support customers in home loan difficulty

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  • Banks act to support customers in home loan difficulty

    Banks are acting to support mortgage customers who are finding it difficult to meet their monthly repayments the British Bankers' Association said today.

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  • #2
    Re: Banks act to support customers in home loan difficulty

    Banks act to support customers in home loan difficulty


    06/08/2008


    Banks are acting to support mortgage customers who are finding it difficult to meet their monthly repayments the British Bankers' Association said today. High street banks provide two-thirds of all home loans and, in contrast to other lenders - where the FSA yesterday calculated an increase in repossessions of over 40 per cent - saw their figures rise over the same period by only 6.6 percent.

    Chief Executive Angela Knight said:
    "Home repossession is absolutely the last resort for banks. Our high street lenders are actively helping more people stay in their homes in these difficult times. We recognise that, with rising food and fuel costs, people may be finding money more difficult to manage and we urge anyone who is worried about meeting monthly mortgage payments to get in touch with their lender as quickly as possible. The problem won't go away on its own but banks are well placed to help customers plan their finances to keep the whole show on the road."
    Mrs Knight also said the banking industry was the chief funder of the UK's independent financial advice charities and, itself, the first provider of debt advice for customers.
    The BBA was pleased the FSA had been careful to distinguish mainstream lenders from those specialists responsible for much of the increase in repossessions.

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    • #3
      Re: Banks act to support customers in home loan difficulty

      Indeed.

      It's sad (but not surprising) that the vast increase in repossessions is attributable mainly to the dodgier end of the mortgage lending market. I say not surprising because obviously the dodgier lenders have loaned money to higher risk customers, who are most likely to default and hence get repossessed.
      Last edited by argentarius; 10th August 2008, 21:59:PM. Reason: lenders not lends

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      • #4
        Re: Banks act to support customers in home loan difficulty

        And now the banks are trying to dig themselves out of a hole of their own creation by penalising the very market that they created in the first place.

        Angela Knight and the BBA have no shame it would seem.

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        • #5
          Re: Banks act to support customers in home loan difficulty

          was NR considered dodgy then?

          I can see it is now, as having seen the reports of the 125% mortgages it was involved in I am amazed at their lending policies. But do you think the public saw them as "dodgy" a few years ago?

          I dont think so - most people trusted them as a reliable institution.

          How wrong we were.
          "What makes the desert beautiful is that somewhere it hides a well." - Antione de Saint Exupery

          "Always reach for the moon, if you miss you'll end up among the stars"


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          • #6
            Re: Banks act to support customers in home loan difficulty

            Originally posted by argentarius View Post
            I say not surprising because obviously the dodgier lends have loaned money to higher risk customers, who are most likely to default and hence get repossessed.
            I have to take issue with that comment.

            The 'dodgier lends' as you call them, have loaned money to those that a computer deems 'most likely to default' which is not based on individual circumstances, but is based on maximum income for them when and if they do default.

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            • #7
              Re: Banks act to support customers in home loan difficulty

              I think I see what you are trying to say, Amy, but if so I don't agree with the whole of it.

              Yes, almost all lending decisions are based primarily on computer-based assessment of likelihood of default, based on an individuals' circumstances. So if you are saying that an individual's actual likelihood of defaulting is not the same as that computer-based assessment, then obviously you are right - almost nobody is equal to the average of all people in a category.

              But I don't accept that mortgage lenders (and it's them that the original article was about) lend money in the expectation of making money when customers default. Mortgage lenders do not, in general, make money if they repossess properties.

              There is a separate discussion about whether dodgier lenders like customers who are permanently in arrears, but never default enough to be repossessed, because they levy high charges on them. If that's what you want to talk about, that's fine, and I'll do so.

              Sorry for the typo "dodgier lends" which I have now corrected to "dodgier lenders" as I intended all along.

              Comment

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