It’s a phrase that seems specifically calculated to turn an absolute disaster into a mindless platitude. The current phenomenon of Negative Equity can mean despair and worry for many hundreds , but has only really been around for the last few tens of years. When we buy financial investments there is often a form of health warning attached which says words to the effect of “investments can go up and down”, but when We Buy Homes nobody seems to be obliged to apply such a warning.
We Buy Houses to live in, or so we believe , but they are also the biggest investment we ever make , generally , and as such there is a almost free market that facilitates the trading of property and it most surely does go up and down, even to the point where the price of a property might well be less than a loan that a property owner has got against it. Negative equity in action .
But this round of negative equity has an singularily bitter taste about it. Many thousands of people were lured into putting down little or no deposits against their homes by unbelievably attractive packages offered by a number of financial organisations . These were widely taken up especially by people in the United States who really should not have been offered finance at all.
If presently I was to Sell My House I am in the fortunate position that I would take away a substantial amount of equity with me. I am not currently thinking I may Sell My House but I am conscious that my circumstances may be different in the future therefore I take my home owner responsibilities seriously. But I also believe my lender should take some responsibility for what happens to my home. After all they have invested very substantially in it. They should not be allowed to stipulate that when We Buy Houses we must take all the responsibility for what happens if circumstances change and we get into difficulties.
When We Buy Homes with a loan it should be perfectly clear to the lending institution what the consequences are if the economic climate changes and the home buyer is not able to make the monthly payments to repay the loans. They should not be allowed to entirely abuse their responsibilities when a homeowner experiences difficulties . And they most surely should not have been bailed out by a weak government with such an infatuation with business that they have been prepared to shore up institutions at the expense of the taxpayer, when they could have intervened in dozens of different ways which would have benefitted both the homeowner and the taxpayer and would have alleviated the effects of the house price crunch permitting more people to stay in their homes.
It’s pretty obvious that this will not be the last house price crash. Prices will go up and down again. Lenders will over lend, not check buyers’ financial capabilities, buy up dodgy bonds etc all over again. Why do I think this? Because no effort has been made to control the way the whole system operates. The new coalition government has not made any real noises about changing the way the house buying system operates as far as financing house purchases goes.
The nationalised institutions are no more responsible for their part in the property purchase transaction process than they were before . Their only real answers so far have been to make house purchases more difficult and expensive for everyone whilst allowing repossessions to increase . And without a strong government that is prepared to legislate this boom and bust cycle is bound to re occur over again.
No related posts.
