British Lenders Learn from the Yanks 2
Upside down on the other side of the pond:
Falling house prices mean the amount borrowed could be greater than the value of their properties.
The data from the Council of Mortgage Lenders comes as figures show the housing market is slowing down further.
Separate housing figures suggest the number of transactions per estate agent has hit a 30-year low.
And there is no doubt it is highly likely that they took out these 100% mortgages because their estate agent or lender or both told them it was a good move to make.
This credit crunch or whatever you want to call it is worldwide and long-term.
June 11, 2008 at 6:37 am
"…it is highly likely that they took out these 100% mortgages because their estate agent or lender or both told them it was a good move to make…"
I doubt seriously anyone held a gun to these people’s heads and forced them to take out a 100% mortgage. I’m sure lenders tried to sell them on the "benefits" of a 100% mortgage, but the final responsibility rests with the borrower.
I know someone who has a relative working in the mortgage industry. He has customers who come in and have no idea that, when they sell their house, they have to take some of the proceeds and pay off their equity line of credit. Is that the fault of the lender? Never underestimate the financial stupidity of the American consumer.
June 13, 2008 at 3:26 pm
I have no doubt that your relative is a person of integrity.
That is, he did not work for Ameriquest and does not work for Countrywide.
It is the fault of the lender if the lender does not set the customer straight. If the lender lets them persist in their ignorance, he becomes <strike>complicit</strike> an accomplice.
And if the buyer has never bought a house before? There is an even higher burden on the lender or the broker to make sure that the ignorant are knowledgeable.
To point out that some may enter the housing market equipped with ignorance is merely to emphasize the responsibility of professionals, who claim to have codes of ethics, to educate them.
One really can’t prey on the innocent and then insulate oneself by claiming it was the fault of the innocent in letting themselves be preyed on.Â
It may be legal to do so, but it sure as heck ain’t moral.