Tuesday, 5 August 2008

Foreclosures, repossessions, protests and a cash rich Iraqi government

Read on McDuff, read on.....

Ready for round two?

The US foreclosure crisis is far from over.

"Homeowners with better credit are now falling behind on their payments in growing numbers. The percentage of mortgages in arrears in the category of loans one rung above subprime, so-called alternative-A, or alt-A, mortgages, quadrupled to 12 percent in April from a year earlier. Delinquencies among prime loans, which account for most of the $12 trillion market, doubled to 2.7 percent in that time."

More repossessions than stated, says Shelter

There are times when I really feel out of my depth. I keep away from debt; it is a bad thing, so could somebody please explain to me a "second charge" home loan. Shelter, the housing charity claim that tens of thousands of people have taken out these loans and it is fueling a surge in repossessions.

In fact, Shelter, the housing charity, said that the number of repossessions could be a fifth higher than current figures suggest because of actions taken by “second charge” lenders.

Protest at the Fed

Why doesn't this kind of thing happen here.

Oh yes, I remember, we live in a police state where every move we make is captured on a CCTV camera. Perhaps it is better that we stay at home and watch it all on TV.

Irish Shares Soar Most Since 1987

Dead cat bounce, definitely. Just watch what happens tomorrow.

Chancellor considering stamp duty deferment plan

Shameless and shameful.

Iraq Government Has $79 Billion in Unspent Cash

I am waiting for story about the Iraqi sovereign wealth fund that bails out Citigroup. It is definitely coming.

Haven´t Heard The Word Decoupling For A Long Time......

What did happen to the idea that Asia would grow while the US sank into a recessionary mire?


Anonymous said...

Second charge loans are secured loans taken out after the mortgage. You know, those ones on the TV which start "If you're a homeowner..."

Anonymous said...


Perhaps you should have a name for these bullet point posts. All very interesting. My thoughts.......

Alt-A defaults: Talk about blindingly obvious over a year ago. We all saw the reset charts would start spiking a couple of months ago. But the MSM only just realises.

Shelter: Seconds are what the yanks call piggy-backs. We'll probably find that lots of fools were using them to get the downpayments. Very difficult to have sympathy with these people being thrown out of their homes.

Irish shares: what's keeping the whole global market up?

Brown: True to form. Expect worse.

Decoupling: The inflation fear rests on decoupling. Deflation doesn't.


Anonymous said...

Dear Alice and friends,

"Costa del Crash". The UK estate agent Savills said Britons are having to accept price cuts of 20pc to 30pc if they need to sell their villas in a hurry.


Have fun!!!


EdieS said...


the seconds are called HELOCS and 'piggyback' loans. Here is how they work:

HELOCS: Home Equiy Line of Credit. Based on the value of he home, how you have paid down, and the supposed 'equity'of this, you tok out a line of credit to do whatever- the family vacation to Great Britain or Europe or Disneyland, Junior's degree in Theatre, a new SUV, a new kitchen so that you vcan finally cook like Jaime, and so much more. Of course, when the credit line is exhausted, you still have to pay back all that money, with interest, and now, you have no equity in your home.

2) The piggy back is similiar to the HELOC, in that instad of putting down 20% fo rteh down payment, you get a loan to to cover the down payment- at an higher interest rate. The second mortgage would be at a standard rate (in the US, repayment with interest + principal) or at an interest only rate ARM. It was a really crappy way to buy a home, and this was sold to people of races and classes in the US. What makes it even more crappy ws that there was a fair, equitable oan structure in place- the FHA loans, which people would pay just 3-10% downpayment, mortgage insurance and a low market rate. Of course, FHA loans did not make US banks as much money....

Markbaldy said...

As a saver and tax-payer I am sick of Brown and Darling using my money to bail out failed businesses and have my savings eroded because they want to support people who borrowed too bloody much in the first place !
New Labour are a bunch of corrupt liars... I bet Gordon Brown is out of Downing Street before Christmas.
That is sad because it will be some other poor sods that will have to try and sort out the massive mess that Mr Bean and his merry band of followers got us into !

Anonymous said...

Mark: agreed! If anyone was saving for their deposits as the last property boom was on (say up to '93), they made about a real 1% annual return on savings in the very best savings accounts.

That's because the Chancellor takes a healthy slice of the interest, even when inflation is out of its lair.

The loose attitude to inflation combined with tax on savings interest means that the profligate (both those who borrow too much and the Chancellor) profit out of savers; and in the seventies property boom it was a lot worse, with a negative real return for savers.

These people are moral reprobates.

B. in C.

Anonymous said...

About the Iraq money. The US is following a policy of absorbing countries, particularly oil producing countries into the dollar. Nobody asks the question why the government surplus is in dollars when the currency is the dinar. Holding foreign reserves is all well and good, but the Iraq government isn't making that decision, the US is.
The US is buying oil with dollars that Iraq cannot actually spend. This is appropriation of oil reserves.
Which government, ever, in the history of the world, has been too cr*p to spend a surplus !
If these dollars were spent they would have the expected effect on the value of the dollar....

Anonymous said...

There's a wnderful cartoon in the Guardian today: Darling with fat, cigar-smoking city cat on his lap making a TV appeal: "Together, we can help Tiddles" :)

J.C.G. said...

"I keep away from debt; it is a bad thing"

Lucky you, I take it you went to University before the early Nineties? When you've had to borrow £10-30,000 by the time you're 21 to fund a degree, suddenly six times your salary for a house doesn't seem like such a terrible option.

You have a whole generation of people who are being positively encouraged to lose that age-old fear of debt, so it should be no surprise to anyone that we have landed in this situation.

Alice Cook said...

JCG I can only agree. Alice

Anonymous said...

Right. And there's the classic Labour socialist trap. Make houses more affordable by encouraging cheap lending. Make university more affordable by encouraging cheap lending.

What happens? More money enters the market, prices go up, and the only difference in outcome is people a getting the same thing in return for a much heavier tax burden while the insiders make out like bandits.

Seriously, this is what happens when not a single person in the party understands economics.


J.C.G. said...

True Nick, but then I think we're all going to get some sharp, practical economics lessons in the coming months.

The really silly thing is (and again, just using myself as an example) when I was at Uni, the "rich kid" types were getting their full loan entitlements and putting them in TESSAs because the loan repayment amount would be less than the amount they'd gain when the savings account matured.

I can't help thinking that if the Govt had given means tested grants to those who needed them and left those who could afford it to fend for themselves, then graduates would have been leaving Uni with no debt ready to save a deposit in order to become a bank's dream first-time buyer.

Instead of which, they had to offer crazy mortgages because graduates were so saddled with debt that there was no hope of them getting on the ladder otherwise. And what's a housing market without buyers?!

Sorry, I only did Law, someone with an Economics degree is going to have to explain it for me...

Stop Foreclosure said...

Hello. This post is likeable, and your blog is very interesting, congratulations :-). I will add in my blogroll =)THANX FOR MAKING SUCH A COOL BLOG

Let me share with you a great resource,

Stop Foreclosure

They really know what they are doing. If you are in need of Foreclosure Assistance. Just contact them and thats all.

Hope this will help.