Pretty sad and depressing to watch, one thing I don’t understand is the woman who got evicted after living in her house for 15 years (and I guess for the family of 6 too) and paying her mortgage for most of that.
The bank now owns the house and put it up for sale, the thing is that the house is worth around 3x what she bought it for, so does she get any money from the bank after the sale?
Because surely the bank is only entitled to clear the debt that she had left over to pay plus costs, and she is then due the rest?

It doesn’t look like that is the way it works though!

Then why didn’t she sell up before it got to that?

one thing I don’t understand is the woman who got evicted after living in her house for 15 years (and I guess for the family of 6 too) and paying her mortgage for most of that.
The bank now owns the house and put it up for sale, the thing is that the house is worth around 3x what she bought it for, so does she get any money from the bank after the sale?

not if she was paying interest only!

OP – yes the sale clears her debts and she gets the rest.

Yeah, that’s what I thought!

EDIT:
That reply was to b r

Sad, sad program.
Scary too, since two of the people were obviously pretty successful before it went wrong!

lightman – you’ve assumed she has not remortgaged (possibly several times) and released equity each time.

not if she was paying interest only!

Makes no difference. If its increased in value x3 since purchase, they can’t possible owe more than 1/3 of its current value.

The mortgage company don’t own the whole house, just the debt owing on it, which is the same as the amount borrowed to buy it if it was an interest only mortgage.

Aye. Pretty depressing.
On the good news front I see Will Self and Peter Hitchens are on Question time. Hopefully Will is in a bad mood : )

The woman was having a fairly tough time even without the eviction. Her husband had left her and she was fighting breast cancer, and only owed £9k.

It’s a shame that the banks that were a major factor in getting the nation into the current indebted situation (and have behaved appallingly selling PPI and manipulating Libor rates) can’t be a little more lenient in such circumstances. No-one wins as the council will have to find her housing, and the house was still for sale and would probably only be sold for well below its market value.

If people are taking the piss its fair enough to evict them, but many of the people in the programme had had an unfortunate set of circumstances such as unemployment and illness happen at the same time. We need to care more about people like this than bailing out the over-paid bankers.

It’s a shame that the banks that were a major factor in getting the nation into the current indebted situation

That and those who borrowed more than they could afford and their assets were worth banking on low interest rates and no more boom and bust.

The house will be sold to clear the debt, the rest goes to her. However if the re mortgaged etc less will go to her.

How exactly does a banking system work if you are not obliged to meet repayments that you agreed to, who picks up the shortfall in these situations? Should all those paying on time have to pay more to cover those who don’t/can’t?

In all of this there will be some tough cases but these should be presented on facts.

That and those who borrowed more than they could afford and their assets were worth banking on low interest rates and no more boom and bust.

The house will be sold to clear the debt, the rest goes to her. However if the re mortgaged etc less will go to her.

How exactly does a banking system work if you are not obliged to meet repayments that you agreed to, who picks up the shortfall in these situations? Should all those paying on time have to pay more to cover those who don’t/can’t?

In all of this there will be some tough cases but these should be presented on facts.

would probably only be sold for well below its market value.

It appears to currently have an offer of £170k on it, which I’d say is a pretty good price for an ex-council house in Dagenham. I’d guess it’s been used as a bit of a cash machine although she could also have remortgaged it as part of a deal to keep the house when her husband left. As usual I suspect that in each of those cases there’s as much of the story untold as told.

“How exactly does a banking system work if you are not obliged to meet repayments that you agreed to, who picks up the shortfall in these situations?”
er, yes; who indeed?
Of course, it’s OK if it’s the bank about to go tits up through overextending it’s greed…

How exactly does a banking system work if you are not obliged to meet repayments that you agreed to, who picks up the shortfall in these situations?

Have you been asleep for the last few years?
It is all of us + unemployment + tax breaks for the rich + bankers still taking their bonuses.

“How exactly does a banking system work if you are not obliged to meet repayments that you agreed to, who picks up the shortfall in these situations?”

One of the reasons that the crisis hit was that in the US you can just give the keys back, and the bank can’t come to you for any shortfall. So as you can guess, with these ‘rules’ the last thing a bank should be doing is lending +90%, and what did they do?

I’ve never understood why ‘poor’ people always seam to have iphones, sky tv and new cars?!?

There are probably plenty of things you never understand. Why waste time thinking about them?

The family who bought their house relying on one main client in their business were utter fools… that’s why we get into trouble. What are the chances of retaining a client for 20 years?

We bought our house at a range that either of us could pay on our individual earnings. I can’t figure out why people stretch themselves to the limit to get a roof over their head. Stupidity, pride and greed.

I can’t figure out why people stretch themselves to the limit to get a roof over their head.

Because for many many years people were sold a dream or permanently increasing equity and a fear of the affordability of housing always moving away from them.

If you were able to afford a family home on a single wage I guess you earn a fair wack more than average, or were very lucky with the timing of your purchase.

What are the chances of retaining a client for 20 years?

Maybe lots of businesses expect to have more than one client over a 20 year period?

Missed the beginning but I’d do all I could to sell a house before it got repossesed. Ours would go on the market as soon as we could see we were going to struggle to meet payments and it would be at ‘priced to sell’ price too. From what I’ve seen repossesed properties end up going for very low prices compared with private sales as all the bank are interested in is recovering the mortgage value and even then they know they can persue the owner for any shortfall.

It’s obvious that some people get emotionally overwhelmed when the bank starts turning on them and don’t do all they can to manage the situation.
If owners promise the judge that they will put the property on the market and actively sell it at a fair market price, he will usually allow it, meaning the owner can stay in control of the situation.
Just don’t piss the judge off afterwards by not doing it.

Ours would go on the market as soon as we could see we were going to struggle to meet payments and it would be at ‘priced to sell’ price too.

What, at a loss? Easy statement to make if your house is worth far more than you paid, but for many this just isn’t the case.

I can see why people hold out, as if you’ve no money the last thing you want to be is homeless – I mean, have you seen what it costs to rent, a couple of months rent up front for starters.

One problem is that the banks/Govt have managed to get people to believe that its ‘reasonable’ to pay 3-5% over the base rate, it use to be 0.5-1.5%.

What, at a loss?

I really don’t know, tbh.

Would I risk being ‘voluntarily homeless’ by selling the house out from underneath myself and being on the street with my family? Probably not.

It is easy to say ‘It couldn’t (or wouldn’t) be me’ I know.

It does appear (to me) that people end up in this position from not taking control of a situation early enough. Maybe my ‘I’d sell up straight away’ approach is too cut and dried but it does seem that people just get overwhelemed and swept along by ‘events’ when they could influence things far more.

I can’t figure out why people stretch themselves to the limit to get a roof over their head.

Becase in the south a roof over your head pretty much costs the limit?

Even a 2 bed terrace in what’s affectionately known as ‘west reading’ (aka Oxord Road) is £180k, it’s ridiculous.

Easy statement to make if your house is worth far more than you paid, but for many this just isn’t the case.

The people who made the programme must be aware that house sales data is public these days. In that particular case the guy appears to have paid 350k for the house, not the 500k reported in the programme. He should have been sitting on nearly 200k of equity. Once again the programme didn’t give the whole story.

I had a house repossesed once upon a time in Liverpool. Basically i sectioned my ex-wife into a mental hospital, however when she came back out, she moved back into the house and wouldn’t move out.

I eventually stopped paying the mortgage and she was evicted…

it screwed up my finances and credit stuff for many many years.

Hmmm, sad sad programme and just makes you think about what’s important in life.

Still it seems in some of these cases that these people can’t even do enough to help themselves?

The foul mouthed mother of the 6 x children seemed to be constantly smoking (not a cheap hobby as we know). The little boy described playing on his X-Box all day, the little girl left alone seemed to have her own mobile and they all seemed fond of expensive take away coffee’s and getting taxi’s everywhere!

The businessman whose house was being repossessed was still driving round in a big Lexus 4×4. They had also used the proceeds from their second car sale to fund Christmas – what about the mortgage?

Honestly, priorities people!

The businessman whose house was being repossessed was still driving round in a big Lexus 4×4!

and that I’d be on an expensive lease he probably can’t get out of – no doubt up for repo too

and that I’d be on an expensive lease he probably can’t get out of

Yep probably, but honestly should we really be feeling sorry for people who have borrowed themselves up to the eyeballs to get a big house and a nice car rather than living within their means?

Unfortunately it’s this sort of crazy borrowing that has fueled the house price boom, and now left the majority of younger people unable to afford a place of their own due to the crazy asking prices of the current housing market.

Very little sympathy in this situation.

I bet it wouldn’t have been long ago that businessman would have been claiming sucsess down to hard work, and blaming the rest of society’s victims for their own problems and supposed laziness.

thisisnotaspoon – Member

I can’t figure out why people stretch themselves to the limit to get a roof over their head.

Becase in the south a roof over your head pretty much costs the limit?

Even a 2 bed terrace in what’s affectionately known as ‘west reading’ (aka Oxord Road) is £180k, it’s ridiculous.
Do say where, a mate is struggling to find anything that’s habitable round there for less than 200k
I had one behind (now ex)Rileys that sold for £160k in 2002.

Oh another note if you live local, once I’m allowed back on the bike I’m going to need to get fit again if you’re interested in some riding.

SM

“In that particular case the guy appears to have paid 350k for the house, not the 500k reported in the programme”

Or he percieves its worth 500k because some valuation says so and wont let it go for a penny less …..

Do say where, a mate is struggling to find anything that’s habitable round there for less than 200k
I had one behind (now ex)Rileys that sold for £160k in 2002.

Dunno, just looked on rightmove and that was the cheepest allong oxford road. Friends just bought a nice 2bed house in Whitley for similar money. No idea about habitable though.

It’s stupid though, the average wage in Reading is apparently £30k, the cheepest hosues are £180k, so if you’re below average and single you can’t get a mortgage even at 5:1!

Oh another note if you live local, once I’m allowed back on the bike I’m going to need to get fit again if you’re interested in some riding.

SM

Drop me an e-mail, I usualy ride with the Trolls at Tunnel Hill Tues and Thurs evenings if you want a lift down there and either the Chilterns or Swinley depending on the weather at the weekends.

SM, my mate lives on Oxford road,…. i work not far…. i don’t often ride there though, more over didcot way.

Drop me a mail though if you want fella.

there are three basic essentials to survive in our country,food, clothes and shelter. in this ‘rich’ developed economy, the system is unable/unwilling to provide the latter.

Back to the OP. are banks obliged to try and sell the property at the market rate if they repossess your home or is there no legal obligation for them to do so? In other words, sell the property for a price that is going to ensure they get their money back only?

“the system is unable/unwilling to provide the latter. “

no it provides it ….. but the ability to choose where you want to live is removed…..

my point is the systematic and ideological attack on social housing , has resulted in the present ‘crisis’– it is a very crude policy that seeks to enslave people to a ‘mortgage’ –that many cannot fulfil due to circumstances beyond their control.

The “market rate” is only whatever you can get for it when you sell it.