US Foreclosures 2nd wave

[Mailman]

Second wave of foreclosures coming

this could get expensive for the US tax payer.

OK now as an exercise complete the following sentence:

The UK won't have a mortgage crisis like the US because.....

So it sounds like McCain got it right then eh...buy up all the dodgy mortgages out there, negotiate others down and save the economy.

Not bad for an old, out of touch, eccentric geezer innit?

Mailman

[Cyberman]

That's a goodpoint in a recession. A council house can't go into negative equity. No, you laugh, but it's true in a deeper sense.

Anyway, look atsome examples: the woman who owes 207k on a house worth 150k, worreid about losing her 65k savings that she put in as deposit. So she paid at least 277k for a 150k house? I don't see that happening here so much, for private house-buyers (BTL yes, executive riverside apartments rubbish, yes). But it's not surprising if you know those places: recent development, houses and malls and nothing else. Nothing under it but 8 feet to sea level in a hurricane zone, and nobody who belongs to the area, because it was a wasteland just a few years ago. It can become a wasteland again just as quickly because nobody really wants to live there, they just moved because the arithmetic looked right. Now it looks wrong, and nobody wants to buy your house.

Edit: I almost mentioned DiscoStu's point too. Same point: our housing is less disposable. It has more intrinsic value.

Negative equity is irrelevant unless you are forced to sell. Those that are forced to sell generally have been lent too much and never had the ability to repay the loan once interest rates rose.That really should have been considered when they took out the loan. The greedy will be falling like flies but it is as much their fault as the banks and HMG.

[PM-Junkie]

Negative equity is irrelevant unless you are forced to sell.

Utter garbage, and further demonstration (if any were needed) how little you understand economics. Negative equity most definitely is NOT "irrelevant" - it has a direct impact on comsumer confidence whether or not they are selling their house - that impacts the amount of goods they buy - and that impacts companies' bottom lines.

[ace00]

Negative equity is irrelevant unless you are forced to sell.

This is also a widely held misconception / platitude. I hear it about my ISAs a lot.
You need to consider the time-value of money. It's a very important concept. In summary, you need to consider how much your invested money would be worth if it had been in a bank for the duration. Then you need to consider inflation going forward, and then you will see that in fact you will never reach the value of that money barring another huge bubble in that asset class, in the near future. Several of my hard-earned ISAs are now effectively worthless due to this. Which is somewhat annoying.