mortgage arrears

[rogersonjeff]

hi a question which is proberly stupid

i am going to ask my mortgage co (GE MONEY) if i can go interest only for six months

can they change my rate? this currently tracks barclays base rate +1.5%

so my rate is 2%

i have been in arrears with them for two years and have clawed it back from £2800 to just 16 days behind,this goes down monthly

the extra money will clear some other priority debts which are also in arrears

they have asked me if i want to extend my term to reduce payments by phone

ive had £2800 pounds of arrears charges and dont want anymore

[banker_rhymes_with]

Hello Rogersonjeff!

 

I regret I don't know, but I would be interested in the answer too.

 

This is no direct help, but it may make you negotiate harder if you realise these bankers do not really care about you, all they care about is getting a large chunk of your income every Month.

 

They will bleat and moan about how you must pay them back, when in reality, you borrowed the Debt into existence. They did not open their vaults to remove bags of money that other people had saved, they just clicked a few buttons, and a Hard Drive somewhere woke up and registered the extra digits you had just created for them.

 

The Mortgage was secured against a property, which really means the banks stopped you from going out and spending it all on loose Cars and fast members of the opposite sex. They knew that once they had finished counting to 10, the number-money you borrowed into existence would re-appear on the Hard Drive of one of their banking mates. The number-money Debt hops around their computers, then you get to slog away repaying it with your hard earned money. Likewise, the resident of Number 11 Downing Street will be pleased to see the UK number-money supply has nudged up by the value of the Debt you borrowed into existence...they need the balloon to keep growing, because there is never enough number-money to repay all of the Debts. The worst effects of this can be kept at bay for as long as new people arrive to borrow to fill the shortfall, but that only increases the problem, and prolongs the shortfall.

 

If people stop borrowing, other people go bust and lose their businesses, homes and real assets. Again, whilst the bankers pretend that's terrible, they are actually smiling as they say this, because they know a good Recession pushes another wave of real Assets into their hands. Indeed, they almost want a Recession every now and again...I'm sure they would not dream of constraining the money supply just to induce a Recession .

 

Then again...it's perhaps no accident that the percentage of assets and property in private hands has been going down, and down, and down, such that the greater percentage is now owned by, wait for it, banks and financial institutions linked to banks. Less than 60 years ago, they owned less than 20%, now they own more than 50%.

 

The big banks live forever, they are not going anywhere, and the people that run them will be Stardust like you one day, while the bank trundles on. Their current minion employees are just as deluded as everyone else, and honestly think you have a duty to slave away and repay the Debt at a certain rate, with the goal of making full repayment by the end of the 25-30 years they have conned you into becoming a Debt Slave for them.

 

Why should the bank bosses work for a living when they can get you to do it for them, and make you pay them for the privilege!

 

The reality has little to do with repayment, and more to do with keeping as large a flow of your income heading their way as they can engineer, or the other alternative is watching you made homeless so they get the asset anyway, sell it, and inflate their coffers yet again (the original Debt stays part of the number-money supply, it's not ever cancelled once it comes into being).

 

They won't like Interest Only, and the minions will do all they can to make you feel bad, and quote all sorts of rules at you to make you keep paying, but if you offer to pay just the Interest, that is still, actually, a very good deal for them. It's still hard-earned money, and it's still heading their way, just less of it than they'd like.

 

Sure, your Mortgage won't go down.

 

However, guess what's around the corner?

 

Yep, inflation. The price of Gold shooting up and up is a good sign that those who have bags of real cash want to off-load it fast and swap it for something that will keep pace with inflation like, er, Gold.

 

Horrible as it is probably going to be, once inflation comes back, the likely effect is your house will creep up, then shoot up in value, as will, indeed, your Mortgage Interest Only Payments!

 

The trick, if you can hang on to your socks when this all gets underway, is to keep your home, keep paying the Mortgage Interest, and hope that inflation will reduce the real value of your Mortgage.

 

Say, if your Mortgage is £75k and your home is worth £100k, then in ten years time, once we've had another round of inflation, your home could well be worth £300k, while your Mortgage is still £75k. You'll also have paid them a fair amount, but so long as the home shoots up and the Mortgage stays where it is, you may be OK in the long run.

 

Put another way, you own £25k now, or 25% of your home that's worth £100k with a £75k Mortgage. If inflation shoots up and your home does hit £300k, whereas your Mortgage is still £75k, then by that time you own £300k-£75k = £225k or, 75% of your home. That's better than the 25% you started off at, and yet your Mortgage has not moved. Inflation took care of it all for you.

 

Even if you deduct the payments you have made over the 10 years, it should still work out that you own a good percentage of your home by that time.

 

They won't care either way, what they want is your hard earned income and £75k at the end, so never forget that.

 

All that really matters is keeping your family happy with a roof over your head and, if you can stay there, see gradually increasing value tied into the home. Forget about paying off the mortgage, and concentrate on living and avoiding any further Debt. If you start to get a surplus, then use that money to make more money, don't hand it over to the people pulling your Mortgage strings.

 

If you play your cards right, you will build more and more wealth via a combination of home value and anything else you can build up elsewhere with any spare cash you can generate over and above the Mortgage Interest Only Payments.

 

I hope this helps.

 

Cheers,

BRW

Edited March 9, 2010 by banker_rhymes_with
Clarity

[rogersonjeff]

thanks for a brill answer

another question though can they refuse to let me go interest free

[banker_rhymes_with]

Hello R!

 

another question though can they refuse to let me go interest free

 

I regret I do not know the answer, but have heard it said that they may not be able to refuse such a request in the current Recession.

 

I hope someone else will jump in with some answers!

 

Cheers,

BRW

[Ell-enn]

According to the Civil Justice Council Mortgage Arrears Protocols S.7 lenders should indeed consider all options to help including changing to interest free for a period of time.

Mortgage_Pre-Action_protocol_full version.pdf

[banker_rhymes_with]

Hello Ell-enn!

 

According to the Civil Justice Council Mortgage Arrears Protocols S.7 lenders should indeed consider all options to help including changing to interest free for a period of time.

 

Perfect, many thanks!

 

Cheers,

BRW

[ROME2MANDALAY]

Hi

Just thought I would let you know that we have had our interest only application declined today. Our bank told us that they are only offered as a very last resort, we fitted all the criteria last week for the application, now they have declined. Very stressed. Hope you get the answer you are looking for

[banker_rhymes_with]

Hello R2M!

 

Just thought I would let you know that we have had our interest only application declined today. Our bank told us that they are only offered as a very last resort, we fitted all the criteria last week for the application, now they have declined.

 

Sorry to hear this.

 

However, I think the bank have effectively just admitted they are ignoring the Civil Justice Council Mortgage Arrears Protocols that Ell-enn has kindly provided above.

 

They are supposed to seek ways to avoid Repossession, because Repossession is the last resort.

 

If Repossession is the last resort, then how can the grant of an interest only solution be the last resort? You can't have two last resorts, one has to come before the other.

 

I'd ask them again, and bring to their attention the above Civil Justice Council Mortgage Arrears Protocols. Point out that their refusal in these difficult times is going to increase the likelihood of Repossession, when it could've helped to prevent it.

 

Very stressed.

 

I bet you are. But don't just take their word on this and accept it as final, they are just employees, and this is money. Losing your home is a far bigger issue, so don't take no for an answer, and have another go, then another go, then another go, until you get the answer you need and should reasonably expect in this situation.

 

Keep writing, because this will establish a paper trail that you can use against them should the matter escalate to a Repossession Hearing.

 

Hope you get the answer you are looking for

 

And you!

 

Cheers,

BRW

[rogersonjeff]

so sorry to here that .

i thought this would be straight forward how wrong i was

maybe bankrupcy then rent for me

im a self employed taxi driver and would never qualify for another mortgage

my two bed is/was my families castle

[banker_rhymes_with]

Hello R!

 

Don't give up, keep talking on CAG, and you'd be amazed what help will pop out of the woodwork.

 

You will hear set-backs on CAG, but you will also hear when things go right by the shear effort of many people trying to help.

 

Cheers,

BRW

[rogersonjeff]

can i do anything about the £40 per month charge x 3 years +interest

there not gona give me interest free if i try that route

[mkb]

can i do anything about the £40 per month charge x 3 years +interest

there not gona give me interest free if i try that route

 

We were in court recently with GE attempting (but failed ) possession.

 

We had support from our local district council housing dept and he asked the judge if he would order the removal of the monthly arrears fees of £40 plus interest plus legal fees but the judge replied that it was not in his jurisdiction to amend the terms & conditions of the mortgage

 

Not to be deterred however, the guy from the council has authorisation from us to contact GE direct to attempt to have these charges removed - will keep you posted

[HomerJSimpson]

Reclaim unfair mortgage arrears fees, FSA says - MoneySavingExpert News