In our last blog we gave our thoughts on how banks and their lending practises helped to create the property bubble. Since then it has been announced that new regulations are to come into place which will further reduce a borrowers lending capabilities. As stated in an earlier blog, this may not be a bad thing to happen as we believe that home buyers should be looking to borrow less and buy better.
But there is another problem which without managment and indeed government intervention could drive down property values even further and have a disastrous effect on thousands of home owners.
The banks are stating that mortgage arrears are presently running at just over 4% based on a 90 day roll-over period, this figure may be some way from the truth. It does not include mortgage holders who have entered into agreements with their lenders and have taken a payment holiday and/or gone interest only.
When those mortgage holders come to the end of their payment holiday and/or interest only period, then what? In most cases their employment and income status will have stayed the same and in some cases deteriorated even further.
What plan’s, if any, are being made by the banks and government to rescue these troubled mortgage holders?
‘Another fine mess you have gotten us into….’
In our last blog we gave our thoughts on how banks and their lending practises helped to create the property bubble. Since then it has been announced that new regulations are to come into place which will further reduce a borrowers lending capabilities. As stated in an earlier blog, this may not be a bad thing to happen as we believe that home buyers should be looking to borrow less and buy better.
But there is another problem which without managment and indeed government intervention could drive down property values even further and have a disastrous effect on thousands of home owners.
The banks are stating that mortgage arrears are presently running at just over 4% based on a 90 day roll-over period, this figure may be some way from the truth. It does not include mortgage holders who have entered into agreements with their lenders and have taken a payment holiday and/or gone interest only.
When those mortgage holders come to the end of their payment holiday and/or interest only period, then what? In most cases their employment and income status will have stayed the same and in some cases deteriorated even further.
What plan’s, if any, are being made by the banks and government to rescue these troubled mortgage holders?