The UK's Q4 2023 banking crisis.

[spygirl]

On 07/04/2023 at 23:13, sancho panza said:

I can vouch for thsi ref northern rock.I dealt with one squaddie mate back in the day and he asked me to look at his mrotgage and debt postion.I asked him several times 'are you sure this is repayment?' and the answer cam back 'yeah defintiely repayment'

After U go theouhg the bank accounts it clearly isn't.He'd been paying the fucking thing for five years compeletely unaware it was IO.

even worse, he didn't realsie he'd borrowed the moeny for the deposit.(NR did that).Incredible.

I dont know if that laon is still runing but virtually all these people have hjad an opportunoty to bail during the 2011-2020 phase.

People like that BTLer I know with 22 hosues going down,my sympathies are limited.If you could borrow £3mn then you could pay £200 per hpru for accounting adviceBut some of the people they sold these cruddy mortgages too had no idea.

A bloke from the pub bought a hjosue and we were goign thru his finances.

He told me how much hed borrowed (150k ,this was back in 2006ish). How much he paid per month.

I said - Thats not a repayment.

yes it is. I dont want the debt hanging over me....

When we worked thru the paperwork he brought in the next time, he was on a low rate IO mortgage, that went from ~6% IO to ~9% repayment in 2 years.

He lsot the hosuse aftyer 3years.

Te guy wasnt a total morn - close ... - but the thing was even with the stuff he asked fro repayment, the brokers at that time had sold him somethigntotally uistuibale.

This is hy mrotgages are regualted and you have a standard MMR process to thru and check verythig in terms of repayment.

 

 

[Heart's Ease]

 

Ok not UK but similar theme/s?

Ketborad innit?

 

[Democorruptcy]

Getting prepared?

Quote

 

UK chancellor to ‘look at’ raising deposit guarantees in wake of SVB

Recent turmoil showed that banks could fail more rapidly than in 2008 crisis, says Hunt

Britain’s chancellor said on Thursday that his government needed to look at raising the level of protection for bank customers given the speed at which deposits fled Silicon Valley Bank last month.

Speaking on the sidelines of the IMF spring meetings in Washington, Jeremy Hunt echoed comments by Andrew Bailey, governor of the Bank of England. He said the deposit insurance scheme was part of the financial system that needed review and he would look at raising the limit if regulators recommended it.

“We need to look at deposit insurance and keep that under review,” Hunt said. “If there is a decision [from regulators] that we should increase [the £85,000 limit], it will come across my desk as to how we finance that increase.”

The chancellor was responding to a speech by Bailey on Wednesday in which he floated the idea of deposit insurance reform and suggested that depositors needed more reassurance that their funds would be safe in banks.

Hunt said that raising the limit would currently require an immediate call on public money because there was no reserve of money to pay depositors quickly as there was in the US.

He added that having a fixed level of deposit guarantees had been carefully thought through to give confidence to the vast majority of retail investors but that he would “defer to the Bank of England and the [Prudential Regulation Authority] as to what the precise level should be”.

California-based SVB imploded last month. A potential collapse of its British arm, SVB UK, was averted when it was purchased for £1 by HSBC, avoiding the need for the government to step in to protect depositors.

Hunt said one of the lessons of the recent banking turmoil was that banks could fail more rapidly than in the 2008 crisis. “The thing that was most noticeable about Silicon Valley Bank was the speed at which deposits were transferred. Word gets round on social media. And so we need to make sure we are constantly updating our stress testing to deal with situations that might occur.”

However, the chancellor stressed that the UK banking sector was resilient and much stronger than in 2008. “I’m very confident that, notwithstanding the speed that deposits can move, we have a very resilient banking sector,” he said.

https://www.ft.com/content/23ae9892-9486-4ab7-8167-d63e1bb3ece6

 

 

 

[sancho panza]

12 minutes ago, Democorruptcy said:

Getting prepared?

 

 

I got this off moving with charlie.basemtn dwellers generally unemotional lot-with some exceptions-the price action is the rpice action.

I think we're in a tight phase,the trend is unknowable unless you're at the coal face ie EA/COnveynacer/Surveyor/Mortgage borker-everyone else is flying blind to a degree in terms of where rpices are.

if this lady is right,and looking at the figures @spygirl put up the toehr day,we're a long way from ahorde of new entrants piling in.

the problem is that 20% drosp would create chaos for marginal mrotgage providers like the cov.balance sheet looks good marked to model.start taking 20% mark downs and all of a suddne the average LTV moonshoots to 75+ and avenues of finace could start to clsoe.

I think these BS's are more marginlly placed than many realsie

[Democorruptcy]

1 minute ago, sancho panza said:

I got this off moving with charlie.basemtn dwellers generally unemotional lot-with some exceptions-the price action is the rpice action.

I think we're in a tight phase,the trend is unknowable unless you're at the coal face ie EA/COnveynacer/Surveyor/Mortgage borker-everyone else is flying blind to a degree in terms of where rpices are.

if this lady is right,and looking at the figures @spygirl put up the toehr day,we're a long way from ahorde of new entrants piling in.

the problem is that 20% drosp would create chaos for marginal mrotgage providers like the cov.balance sheet looks good marked to model.start taking 20% mark downs and all of a suddne the average LTV moonshoots to 75+ and avenues of finace could start to clsoe.

I think these BS's are more marginlly placed than many realsie

I don't know where 40% nominal falls are supposed to be coming from,  with switching people to IO, extending terms, so many houses now mortgage free, etc. RM default mortgage rate cut from 5.77% to 5.15%. Savers are getting pathetic rates compared to the 4.25% base rate, so banks can offer mortgages rates cheaper than what they should be.

[Colliedog1]

A member of the family moved house and the building society (can't remember which one) altered their mortgage to IO. It was noticed a few years later and changed again back to repayment which they originally had. Don't know how or why this happened but it was lucky that it was noticed. Maybe someone got a bonus for switching them to an IO. 

[sancho panza]

2 hours ago, Democorruptcy said:

I don't know where 40% nominal falls are supposed to be coming from,  with switching people to IO, extending terms, so many houses now mortgage free, etc. RM default mortgage rate cut from 5.77% to 5.15%. Savers are getting pathetic rates compared to the 4.25% base rate, so banks can offer mortgages rates cheaper than what they should be.

This is my point.40% at the mo,seems excessive,but if you want to transact raher than sit there hoping,then I suspect 20% is quite realsitic.

we really could do with some conveyancers/EAs/LAs/surveyors coming on and telling us where there local market is.Because these marekts are very local.but as I say 20% down and a decent chunk of the banking sector needs more capital

There was no indication of whre that lady is...edit.jsut checked her twitter and shes south east.40% to transact down there I can sort of believe given how much higher than the national price/salary multiple it is.

soem mroe from her

edit to add this from the Eye

https://propertyindustryeye.com/property-sales-market-slows-amid-shift-in-market-dynamics/

The latest RICS UK Residential Survey for March 2023 continues to reflect a generally weak market backdrop, with indicators on demand, sales, new listings, and house prices all negative. Moreover, near-term expectations suggest this pattern will remain in place for a while longer amid the tighter lending environment.

However, the 12-month view on sales volumes has improved in the latest feedback, with respondents anticipating a more stable trend emerging.

For new buyer enquiries, a headline net balance of -29% of contributors reported a fall in demand during March (barely changed from a reading of -30% last month). When disaggregated, the downturn in buyer demand remains widespread across the UK, with virtually all regions and the four nations posting a negative reading in the latest returns.

Alongside this, house prices continue to dip, evidenced by a headline net balance of -43% of respondents reporting a decline in the latest results. Although this remains consistent with a clear downward trend in prices, the latest reading is marginally less negative than the figure of -47% seen in previous iteration of the survey. As such, this breaks a sequence of ten consecutive months in which this indicator had deteriorated between April 2022 and February 2023. On a regional comparison, the most significant declines in prices at this point in time are being reported across East Anglia, the South East, the West Midlands and London (in net balance terms).

Going forward, near-term price expectations remain downbeat, returning a net balance reading of -49% compared to -53% last month. Regarding the outlook over the next twelve months, a net balance of -24% of survey participants foresee a further decline in prices over the year ahead

 

 

Edited April 13, 2023 by sancho panza

[wherebee]

12 hours ago, Colliedog1 said:

A member of the family moved house and the building society (can't remember which one) altered their mortgage to IO. It was noticed a few years later and changed again back to repayment which they originally had. Don't know how or why this happened but it was lucky that it was noticed. Maybe someone got a bonus for switching them to an IO. 

sometimes when a customer missed a single payment (which could have been accidental due to the move), some firms moved them to 'hardship' and IO was one of the options.  There probably was a letter sent out which they didn't remember.

 

13 hours ago, spygirl said:

A bloke from the pub bought a hjosue and we were goign thru his finances.

He told me how much hed borrowed (150k ,this was back in 2006ish). How much he paid per month.

I said - Thats not a repayment.

yes it is. I dont want the debt hanging over me....

When we worked thru the paperwork he brought in the next time, he was on a low rate IO mortgage, that went from ~6% IO to ~9% repayment in 2 years.

He lsot the hosuse aftyer 3years.

Te guy wasnt a total morn - close ... - but the thing was even with the stuff he asked fro repayment, the brokers at that time had sold him somethigntotally uistuibale.

This is hy mrotgages are regualted and you have a standard MMR process to thru and check verythig in terms of repayment.

 

 

I got about half way through that word vomit and thought 'must be @spygirl.... 

[spygirl]

14 hours ago, Heart's Ease said:

 

Ok not UK but similar theme/s?

Ketborad innit?

 

Dunno.

US != UK.

You get a mortgage in the US, put it in the Macs and you can stay there, at the low low rate for as long as you like.

If theres delinquency its not mortgage debt, other costs.

 

UK is much more brutal.

Low low rate of sub 1% during Coof ... 2y fix ... onto 6%.

However people in both countries tend to borrow up to their limits.

That was OK up til ~200ish, where youcould assume some wage increase/promotion during the first 5y.

Hiding to nowhere since the early 00, Thought thats rapidly changing.

Normally tablet .... innit.

 

 

 

[spygirl]

13 hours ago, Colliedog1 said:

A member of the family moved house and the building society (can't remember which one) altered their mortgage to IO. It was noticed a few years later and changed again back to repayment which they originally had. Don't know how or why this happened but it was lucky that it was noticed. Maybe someone got a bonus for switching them to an IO. 

Dont assume people in the finsec from ~195 to ~2008 had any ability/competence, whatever.

Obs theres 2008, which is the biggy - Are they fucking morons?

Mortgages were not regulated until very recently ~2015ish???

No oversight. No comeback.

I say this, as I give another anecdote about life cos.

The 80s boom was mainly caused by endowment mortgage,s where LI were competing on how little they could claim would pay off a mortgage.

120k house? 10% IR? Dont worry - 30/m compounding at 30% will pay off the capital in 25y And leave a little for a nice car or family holiday...

There was loads of fun stories floating around when the LI/ WP endowments as an investments blow up in the early 00s.

By blowup I mean mortgages entering the last 10y and the WP policy being so far away from paying off the capital that something really had to be done.

2002 - 15= 1987.  Strange, that, as thats when Lifecos went stellar in selling endowments into 80s housign boom.

https://www.thisismoney.co.uk/money/news/article-1678263/Endowment-warnings-need-an-overhaul.html

15 July 2009

Homebuyers who were conned into buying with-profits endowments are being given the worst possible news.

The vast majority are expected to fall well short of repaying the mortgages they were supposed to cover.

But the bad news doesn't stop there, because the figures being used to indicate whether the endowments are on target are themselves highly dubious and potentially misleading. Some years ago, City regulator the Financial Services Authority set up a traffic light system.

A red letter meant the endowment had to grow by more than 8% a year to hit its target, amber meant growth must be between 6% and 8%, while any endowment needing up to 6% growth per year was deemed to be on course and received a green light.

 

https://www.heraldscotland.com/business_hq/13028477.red-alert-endowment-mortgage-holders/

17th April 2011

Standard compares its £50-a-month typical 25-year endowment payout, now at just over £28,000, to the £20,000 or so that would have been earned in a “typical building society account” over that time.

Royal London, owner of Scottish Life, says its latest endowment payout of just over £29,000 represents a return over the 25 years of 5% a year – or 1.8% after inflation.

But a decade ago, the same policy maturing with Standard Life was paying out £110,000. At Scottish Life it was £115,000. Top of the tree back then was General Accident paying out £119,000 – it is now £34,000.

Even in 2001, Standard Life was admitting that as many as half of its endowments would fail to meet their targets unless stock market returns averaged 6% going forward. In fact, stock market progress has been flat, yet salesmen were allowed to use the 6% figure – and even higher figures previously – to promise homebuyers not only that their mortgages would be paid but with a “nice lump sum on top”.

 

People go on about housing booms.

They never look into the cause.

Well its always some fuckwittery about the  repayment.

80s booms - heavily sold endowments.

00s booms - IO and IO BTL.

Both saw bollocks that increased the leverage, ignored any hurdle on people buying and basically ramped up prices, drawing even more in.

Anyhow, my LifeCo endowment.

In the 00s, when the chickens were roosting, *ALL* lifecos had to go thru their paper work, to check the policies.

Knowing sveral people who were involved, to different degrees, the  findings were -

1) No paper work. Life co had lost it or never had it.

2) Paperwork with out n out lies written down. Lots of lifecos allowed the sales people to actually put down in writing 'Will/guarantee pay off the mortgage. If the life co did not have this paperwork a lot of the customers did.

3) Contracts with the same signature on i.e. sales had been signing off the paperwork without showing it to customers.

Of course the mortgage banks learned the lessons from the endowment scandal as it roleld out in the early 00s - they just let everyone take out IO mortgages, discarding any repayment vehicle.

Bank - You do realise that you will to pay the capital at the end of the term?

Customer - Its a mortgage innit?

Banks - Sign here.

 

Id never say never but the UK has a mortgage market that requires large lump of cash down - 20%, and the mortgage has to have repayments over the term - IO being banned for resi.

 

 

 

 

 

[spygirl]

13 hours ago, Democorruptcy said:

I don't know where 40% nominal falls are supposed to be coming from,  with switching people to IO, extending terms, so many houses now mortgage free, etc. RM default mortgage rate cut from 5.77% to 5.15%. Savers are getting pathetic rates compared to the 4.25% base rate, so banks can offer mortgages rates cheaper than what they should be.

 

11 hours ago, sancho panza said:

This is my point.40% at the mo,seems excessive,but if you want to transact raher than sit there hoping,then I suspect 20% is quite realsitic.

we really could do with some conveyancers/EAs/LAs/surveyors coming on and telling us where there local market is.Because these marekts are very local.but as I say 20% down and a decent chunk of the banking sector needs more capital

There was no indication of whre that lady is...edit.jsut checked her twitter and shes south east.40% to transact down there I can sort of believe given how much higher than the national price/salary multiple it is.

soem mroe from her

edit to add this from the Eye

https://propertyindustryeye.com/property-sales-market-slows-amid-shift-in-market-dynamics/

The latest RICS UK Residential Survey for March 2023 continues to reflect a generally weak market backdrop, with indicators on demand, sales, new listings, and house prices all negative. Moreover, near-term expectations suggest this pattern will remain in place for a while longer amid the tighter lending environment.

However, the 12-month view on sales volumes has improved in the latest feedback, with respondents anticipating a more stable trend emerging.

For new buyer enquiries, a headline net balance of -29% of contributors reported a fall in demand during March (barely changed from a reading of -30% last month). When disaggregated, the downturn in buyer demand remains widespread across the UK, with virtually all regions and the four nations posting a negative reading in the latest returns.

Alongside this, house prices continue to dip, evidenced by a headline net balance of -43% of respondents reporting a decline in the latest results. Although this remains consistent with a clear downward trend in prices, the latest reading is marginally less negative than the figure of -47% seen in previous iteration of the survey. As such, this breaks a sequence of ten consecutive months in which this indicator had deteriorated between April 2022 and February 2023. On a regional comparison, the most significant declines in prices at this point in time are being reported across East Anglia, the South East, the West Midlands and London (in net balance terms).

Going forward, near-term price expectations remain downbeat, returning a net balance reading of -49% compared to -53% last month. Regarding the outlook over the next twelve months, a net balance of -24% of survey participants foresee a further decline in prices over the year ahead

 

 

40% falls when bullshit hits reality.

My early experience of housing going bad as the earl 90s fall in London/SE.

 I worked with 30yos whod bought places in ~88 who cold no longer afford them, went bust and houses sold off for 50% off 1988 prices in 93ish.

So nominal falls of well over 60%.

Housing is a market with lots of leverage. Get it wrong and you loose big.

 

[sancho panza]

27 minutes ago, spygirl said:

 

40% falls when bullshit hits reality.

My early experience of housing going bad as the earl 90s fall in London/SE.

 I worked with 30yos whod bought places in ~88 who cold no longer afford them, went bust and houses sold off for 50% off 1988 prices in 93ish.

So nominal falls of well over 60%.

Housing is a market with lots of leverage. Get it wrong and you loose big.

 

I think it was WIlliam WHoite who said the best way to regulate the bankign secotr was to let one go bsut once in a while.

Those tales from the endowment really do exhibit the scale of the malpractice/fraud that went on.HOw many banks went bsut on the back of that?Zero?How many bankers lsot their pensions?Zero?

I'm looking at the balance sheet of the Cov and jsut wondering how they've made it thus far carrying as much BTL debt as they have? Never thought the solution to having loads of dog poo BTL laons on your books was to create even more BTL laons.

I have to hold back here but when I look at the balnce sheet of teh Cov,I see a lot of middle aged men on the Board creating cheap laons for lots of middle aged men Landlords to go go and outbid the Coventry's membership for hosues to live in.

The day they let these BS's loan on BTL was a dark day in many ways

[Harley]

14 hours ago, sancho panza said:

I got this off moving with charlie.basemtn dwellers generally unemotional lot-with some exceptions-the price action is the rpice action.

I think we're in a tight phase,the trend is unknowable unless you're at the coal face ie EA/COnveynacer/Surveyor/Mortgage borker-everyone else is flying blind to a degree in terms of where rpices are.

if this lady is right,and looking at the figures @spygirl put up the toehr day,we're a long way from ahorde of new entrants piling in.

the problem is that 20% drosp would create chaos for marginal mrotgage providers like the cov.balance sheet looks good marked to model.start taking 20% mark downs and all of a suddne the average LTV moonshoots to 75+ and avenues of finace could start to clsoe.

I think these BS's are more marginlly placed than many realsie

This economist predicts Mel's got this and just needs to continue to push the boundaries of her thinking!

[spygirl]

1 minute ago, sancho panza said:

I think it was WIlliam WHoite who said the best way to regulate the bankign secotr was to let one go bsut once in a while.

Those tales from the endowment really do exhibit the scale of the malpractice/fraud that went on.HOw many banks went bsut on the back of that?Zero?How many bankers lsot their pensions?Zero?

I'm looking at the balance sheet of the Cov and jsut wondering how they've made it thus far carrying as much BTL debt as they have? Never thought the solution to having loads of dog poo BTL laons on your books was to create even more BTL laons.

I have to hold back here but when I look at the balnce sheet of teh Cov,I see a lot of middle aged men on the Board creating cheap laons for lots of middle aged men Landlords to go go and outbid the Coventry's membership for hosues to live in.

The day they let these BS's loan on BTL was a dark day in many ways

Well in terms of endowments and banks going bust - none.

Lloyds and ScotWids asode, banks were banks  and LI were LI.

They didnt overlap.

So you had the major product of most peoples life split between two orgs - banks providing the money and a LI promising the repayment.

How in fuck could you start to regulate that?

As a general rule with joint ventures, when things go wrong one side will always blame the other side.

This is why MMR, where mortgages are now all repayment , all one org, is such a game changer in terms of UK HP.

And bear in mind that there still a lot of endowments coming to term.

Some will have moved to repayment, keeping the endowment for savings - not to be sneezed at in the lot of cases - last man standing takes the prize..

However a lot will still be expecting to pay off mortgages, which they wont.

 

[Chewing Grass]

15 minutes ago, sancho panza said:

I think it was WIlliam WHoite who said the best way to regulate the bankign secotr was to let one go bsut once in a while.

Those tales from the endowment really do exhibit the scale of the malpractice/fraud that went on.HOw many banks went bsut on the back of that?Zero?How many bankers lsot their pensions?Zero?

I'm looking at the balance sheet of the Cov and jsut wondering how they've made it thus far carrying as much BTL debt as they have? Never thought the solution to having loads of dog poo BTL laons on your books was to create even more BTL laons.

I have to hold back here but when I look at the balnce sheet of teh Cov,I see a lot of middle aged men on the Board creating cheap laons for lots of middle aged men Landlords to go go and outbid the Coventry's membership for hosues to live in.

The day they let these BS's loan on BTL was a dark day in many ways

There are three young 'engineers' at work who think that BTL is a dead cert to be rich.

They are all early to mid 30s and have chains of shit houses in Liverpool.

They have grown up with the BS on TV and don't know any better and can't think further than their 'normal'.

[spygirl]

10 minutes ago, Chewing Grass said:

There are three young 'engineers' at work who think that BTL is a dead cert to be rich.

They are all early to mid 30s and have chains of shit houses in Liverpool.

They have grown up with the BS on TV and don't know any better and can't think further than their 'normal'.

An engineer is someone who works out what can go wrong and plans for it.

A technician/service  is some who operates on rails, following a happy path.

Someone one leavign HE aged 22/23 in 2002, when all this fuckwittery started, will be 43 now.

I grew up in North during the 80s, as various local employment sectors blew up. Then I moved South fora few years  in the early 90s, when that blew up too.

15 years for me, from ~1980 when I started sort of noticing economic stuff, to 1996ish when it sorted out.

Obs the uber consumption gogo years 85-90 were when I was still in education ...

 

 

 

 

[wherebee]

24 minutes ago, Chewing Grass said:

There are three young 'engineers' at work who think that BTL is a dead cert to be rich.

They are all early to mid 30s and have chains of shit houses in Liverpool.

They have grown up with the BS on TV and don't know any better and can't think further than their 'normal'.

I didn't see the world clearly until mid 30's, to be fair to the younguns.  

[sancho panza]

The Skipton.A building scoiety that owns an Estate Agency/Mortgage Broker.What could go wrong?

As ever the interesting stuff from page 58

My comments in italics

@spygirl thsi really looks like something else.Already at year end 22,they're admitting to 10% loan book over 80% LTV.0.3% over 100%.Suspect the situation is much much worse now.

ALso,anyone else,they appear to be carrying a huge amoutn of interest rate swaps,bigger than their loan book even...if anyone has aview or understanding ehre it would be mcuh appreciated.

Edit;page numbers are as per the PDF

https://www.skipton.co.uk/about-us/financial-results

 

Page 57 Huge uptick in fees and commissions receviable in the Income statement.I'll have to read further where that came from because it dwarfs the profit for the year at £230mn at £1bn...............

Page 58-£24bn loan book

 

page 72-Economic modelling appears to include 4 variables-I eman what could go wrong with that?And one of them appears to be the last thing they should be including-HPI.It's the same 4 variables the Coventry used.

Page 82-There appears to be a fari amount of what might be termed duration risk in their loan book.It appears as if the bulk of loans mature over five years.

Page 84 list of other businesses owned

Page 88-£320mn of assets is intangibles.

Page 100-They appear to have a lot of Interest rate swaps on there books. @spygirl have you seen anything this size before for a £25bn loan book BS?

 

Page 107-Here we go.The main course.Across the mortgage book

As of year end 2022

stage 2+3=  £4672mn /£25317mn in stage 2+3=16.8% of laon book.

I'd imagien the situation is worsening .

It's significant that it's already way higher than 2021 and yet the SKipton has actually grown it's loan book during that period???????? I clearly have no grip on maths whatsoever.

Page 110 Again huge amount of lending in the book to Londinium and the South East for a Northern BS =circa 32%%

crica 20% BTL simlar to Yorkshire and way lower than the Cov.

What's interesting here is the scale of teh stage 2+3 in London and the South East.London is leading the charge.

London Stage 2+3=£946.3mn/£3985.2mn=25% of loans

South East Stage 2+3=     £658mn/£3658mn=18% of loans

 

Page 111-In a year when they've seena huge uptick in Stage 2+3 they've managed to expand the laon book by nearly £2bn

ALso worth noting they're already cvarrying near £2bn of laons at 80%+ LTV which with a 10% downturn in Londinium could possibly bring another £1bn into junk area.

Also worth noting that I can't find a break down by year of laon origin like was avalaiable with the Yorkshire

 

Edited April 14, 2023 by sancho panza

[sancho panza]

41 minutes ago, Chewing Grass said:

There are three young 'engineers' at work who think that BTL is a dead cert to be rich.

They are all early to mid 30s and have chains of shit houses in Liverpool.

They have grown up with the BS on TV and don't know any better and can't think further than their 'normal'.

can you discreetly dind out whcih lender they're with please?

 

It's my experience that the finacially naieve herd into certain instittuions due to acquaitances/social media links and I'm interested to know their borrwing patterns.no pressure.

[Chewing Grass]

1 minute ago, sancho panza said:

can you discreetly dind out whcih lender they're with please?

 

It's my experience that the finacially naieve herd into certain instittuions due to acquaitances/social media links and I'm interested to know their borrwing patterns.no pressure.

Will try but the one I see the most of is a transient in the office.

[Colliedog1]

3 hours ago, wherebee said:

sometimes when a customer missed a single payment (which could have been accidental due to the move), some firms moved them to 'hardship' and IO was one of the options.  There probably was a letter sent out which they didn't remember.

Maybe a letter sent to the wrong address and not forwarded on ?

 

[Colliedog1]

2 hours ago, spygirl said:

Dont assume people in the finsec from ~195 to ~2008 had any ability/competence, whatever.

Obs theres 2008, which is the biggy - Are they fucking morons?

Mortgages were not regulated until very recently ~2015ish???

No oversight. No comeback.

I say this, as I give another anecdote about life cos.

The 80s boom was mainly caused by endowment mortgage,s where LI were competing on how little they could claim would pay off a mortgage.

120k house? 10% IR? Dont worry - 30/m compounding at 30% will pay off the capital in 25y And leave a little for a nice car or family holiday...

There was loads of fun stories floating around when the LI/ WP endowments as an investments blow up in the early 00s.

By blowup I mean mortgages entering the last 10y and the WP policy being so far away from paying off the capital that something really had to be done.

2002 - 15= 1987.  Strange, that, as thats when Lifecos went stellar in selling endowments into 80s housign boom.

https://www.thisismoney.co.uk/money/news/article-1678263/Endowment-warnings-need-an-overhaul.html

15 July 2009

Homebuyers who were conned into buying with-profits endowments are being given the worst possible news.

The vast majority are expected to fall well short of repaying the mortgages they were supposed to cover.

But the bad news doesn't stop there, because the figures being used to indicate whether the endowments are on target are themselves highly dubious and potentially misleading. Some years ago, City regulator the Financial Services Authority set up a traffic light system.

A red letter meant the endowment had to grow by more than 8% a year to hit its target, amber meant growth must be between 6% and 8%, while any endowment needing up to 6% growth per year was deemed to be on course and received a green light.

 

https://www.heraldscotland.com/business_hq/13028477.red-alert-endowment-mortgage-holders/

17th April 2011

Standard compares its £50-a-month typical 25-year endowment payout, now at just over £28,000, to the £20,000 or so that would have been earned in a “typical building society account” over that time.

Royal London, owner of Scottish Life, says its latest endowment payout of just over £29,000 represents a return over the 25 years of 5% a year – or 1.8% after inflation.

But a decade ago, the same policy maturing with Standard Life was paying out £110,000. At Scottish Life it was £115,000. Top of the tree back then was General Accident paying out £119,000 – it is now £34,000.

Even in 2001, Standard Life was admitting that as many as half of its endowments would fail to meet their targets unless stock market returns averaged 6% going forward. In fact, stock market progress has been flat, yet salesmen were allowed to use the 6% figure – and even higher figures previously – to promise homebuyers not only that their mortgages would be paid but with a “nice lump sum on top”.

 

People go on about housing booms.

They never look into the cause.

Well its always some fuckwittery about the  repayment.

80s booms - heavily sold endowments.

00s booms - IO and IO BTL.

Both saw bollocks that increased the leverage, ignored any hurdle on people buying and basically ramped up prices, drawing even more in.

Anyhow, my LifeCo endowment.

In the 00s, when the chickens were roosting, *ALL* lifecos had to go thru their paper work, to check the policies.

Knowing sveral people who were involved, to different degrees, the  findings were -

1) No paper work. Life co had lost it or never had it.

2) Paperwork with out n out lies written down. Lots of lifecos allowed the sales people to actually put down in writing 'Will/guarantee pay off the mortgage. If the life co did not have this paperwork a lot of the customers did.

3) Contracts with the same signature on i.e. sales had been signing off the paperwork without showing it to customers.

Of course the mortgage banks learned the lessons from the endowment scandal as it roleld out in the early 00s - they just let everyone take out IO mortgages, discarding any repayment vehicle.

Bank - You do realise that you will to pay the capital at the end of the term?

Customer - Its a mortgage innit?

Banks - Sign here.

 

Id never say never but the UK has a mortgage market that requires large lump of cash down - 20%, and the mortgage has to have repayments over the term - IO being banned for resi.

 

 

 

 

 

Neighbour used to sell Endowment mortgages,she knew their were shit, 

Parents had an Endowment mortgage in the 80s, when interest rates came down my mum continued paying the higher rate, she also paid every 4 weeks. Paid the mortgage off so the Endowment was extra. It would have just paid the mortgage off

Sister was miss sold an Endowment that she had to change to repayment or pay extra(can't remember) , she was in a profession that could have afforded a repayment mortgage 

[sancho panza]

Just adding to earlier psot ref the Skipton

Page 7 PRA sniffing around and forcing risk eighting changes.

 

Page 19

page 110

BTL 40% of their laons are in stage 2+3 £1905.8mn/£4645.3mn comapred to 2021 when £69mn/£4546mn=1.5% in 2021

Edited April 14, 2023 by sancho panza

[Democorruptcy]

5 hours ago, sancho panza said:

Just adding to earlier psot ref the Skipton

Another to watch is The West Brom? I've been looking at corporate offerings today. The West Brom have a 6.15% PIB priced at about £60 so the running yield is around 10%. Obviously the 6.15% is below inflation currently but the price seems to imply a lack of confidence?

https://www.hl.co.uk/shares/shares-search-results/w/west-bromwich-building-society-6.15-pibs

[Phil]

Co-Op For sale. Do I transfer to Barclays?. Ffs. That's all I need.