Should we feel sorry for SOME people having difficulty with mortgages?

Question

I'm sorry if I sound harsh, but some people in the UK, in the height of the credit free-for-all, were taking high risk mortgages, namely 100% borrowing on an interest-only repayment.

Now should we really feel sorry for people stupid enough to take such a risk in procuring a house, now the bubble has burst and they cannot afford repayments or facing repossession?

Answer 1

In a way yes.  I personally think the utility companies don't really need to raise their prices by as much as they are.

I hope to eventually live and work in London, but I wouldn't rush to buy a house until I was settled down in my job, cleared any debts that I had outstanding and saved a fair amount of money to use as a deposit and for some of the household goods that I will need to buy so that I could borrow as little as possible on store cards and credits cards to pay for these goods.

Answer 2

So you're asking if I should feel sorry for someone living beyond their means?

No... not really. I mean, it sucks that you're probably going to loose your house.... BUT, did you really need 3 extra bedrooms? I mean most of these interest only loans is so that you can afford a payment on a house that you clearly didn't need, or clearly can't afford.

My husband and I can't afford one yet. We're living on base and working towards getting debt free so we can purchase the house we want, not what we can afford. We could get an ok house now, but why put all that time and effort into something that I'm just going to try and turn around and sell.... and probably not be able to sell at what the housing rates are now. You know? So, we'll just wait until we're done with the car payments, which will be end of next year. Then, start looking. :-)

Answer 3

definitely not. Youung people exrect too much and don't save. When they say they can't afford a house they can't afford a house that took their parents 20 years to establish.

Answer 4

poppycock, so what you are saying is anyone who borrows money of any kind is a fool not to forsee into the future financial difficulties coming their way then ?  you could apply your same reasoning to someone who orders clothes from a catalogue or a businessman who takes a business loan only for someone not to pay him and for that businessman to lose everything because of someone else's bad business practices.  of course i feel for those who lose their home, i'm sure it must be devastating no matter what the reason, my first husband and i both got made redundant at the same time and couldnt keep up payments with job seekers allowance, are you saying we deserved to lose our home because of it ?  well we didnt but you cant always forsee the future, if that was the case i'd be a rich woman.

Answer 5

Big mortgages were needed because houses cost such a stupid amount. If they didn't cost so much they wouldn't have needed to borrow so much!

Answer 6

Of course we bloody should!!!

There is a very big difference between someone who WON'T pay and someone who CAN'T.

Also the compulsion to have a home is a powerful instinct and sometimes people take a risk. Usually the people who say 'don't do this' or 'don't do that' have a generous income to afford such shiny ivory towers.

I'm not condoning people being downright stupid and risking everything but do not vilify anyone in a debt/repossession situation. For one thing that could be you next and another it's just the decent bloody thing to do.

EDIT-Omstarts- Firstly my post wasn't a 'go' at you personally you have asked a valid Q.

To take a mortgage 10x your salary interest free is clearly lunacy but do not think that it is only these people who are in the throws of repossesion. The combined factors of utility bill/ food prices etc can be all it takes for someone who has been able to comfortably meet their mortgage or not. You also  forget that all these'sub-prime' mortgages are given to a whole variety of people in different circumstances. It does not always mean someone has thought' i'll inflate my salary to get a more desirable pad' It could be they had incurred debts through no fault of their own , say illness and then the normal lenders won't touch them. So they go subprime were the rates are typically in ther region of 3% higher than normal. Becuase of the adversity within the market these companies have now made their rates evn higher PLUS he addition of higher fuel/utility /food prices.

There are people out there who weren't idiots they could afford the repayments comfortably at the time. Now they can't.

My main gripe here is that people only seem able to feel any sympathy towards their fellow man if they 'deem ' it worthy. If humanity is no longer allowed to f**k up occasionally then God help us.

BTW many moons ago we suffered acute anxiety due to financial difficulty as my husanband had been off work with cancer. When he returned to work as a district nurse he helped many an Alcoholic and drug user. Thankfully it's not all of us who stand in judgement of others and unwilling to help wherever  we find distress WHATEVER the cause.

EDIT2- Bloody h**l this is my longest answer ever.....I do understand your  frustration at the people who were feckless...but how do you know who is who ? If you find out someone has lost their home how would we ever be able to ascertain the circumstances of them initially taking the loan and their susequent default? I'm now going for a lie down...:-)

Answer 7

With any loan or financial decision, YOU, the borrower, are the only one who really knows if you can afford the "fill in the blank".  Do a budget and take responsibility for yourself.  Having said that, some lenders, really the minority, were irresponsible in lending money the borrower had no hopes of repaying.  Can anyone do basic math anymore?

Answer 8

No. Well, only if they're been hit through no fault of their own. Illness, job loss, that sort of thing.

If you don't look at the amount you are borrowing when the repayments are going to push you and think you're going to be shafted if interest rates rise, you don't really deserve sympathy. If the value of the property starts to fall, well, that's just the same risk as everyone else takes whether or not they can afford the repayments.

When I first bought a place, I bought considerably cheaper than I could have afforded for the simple reason that I knew interest rates had a nasty habit of going up. When my wife and I get around to buying somewhere new; we're renting having sold up quite a while back right now, but when we do, it'll be the case that the mortgage will not be based on my earnings, only those of my wife. Two reasons. One, she earns more than me. Two, if the rates go through the roof, my income will be a handy cushion.

Now, I know not everyone can do that. But if you earn A and get a loan for B and the repayments are currently c... you never, ever, take out the most you can afford. Because that little c is liable to become a bloody big C and you'll end up getting shafted.

Answer 9

I don't ......They new the score when they took out mortgages with interest rates they could not afford....

Answer 10

No, people are made aware of the risks when they take out a mortgage. If you can't afford it then don't borrow the money. Especially if you have lied about your earnings then the only person to blame is yourself.

People should learn to take responsability for themselves rather than always claiming to be a victim or that it was someone elses fault.

Answer 11

I feel sorry for those who have a family and bought a house because of need and I think if possible these people should be helped.  Those that bought a house far larger than they need ie, a couple with a 4 bed house or second home owners or some buy to let landlords, I think tough.  You took a gamble, it didn't come off and now deal with it.

Answer 12

You are or appear to be taking on a huge problem- hope you can cope.

Answer 13

i dont feel sorry for them at all, only an idiot would borrow so much money without any guarantee they can actually afford it long term.

these same people will most likely have credit card debt and stuff on finance too.  serves them right, people need to learn within their means instead of keeping up with the jones's.

Answer 14

I feel sorry that they are putting their entire family at risk of ending up homeless, but I don't feel sorry for them making such a stupid mistake of not correctly adding up their monthly expenses.  Some people say the mortgage/loan companies don't explain everything fully, but in all the houses I've purchased in my lifetime, it's usually no stone unturned when it comes to all the financial paperwork.  

Many have had changes in their job situation tho - so many people are loosing their jobs because of gas prices, bad economy, etc....and sometimes, you have to do whatever it takes to get out from under debt just so you can live your life while you find a job.  

Answer 15

some people live beyond there means, it`s nothing to do with there mortgages, thay get credit cards and use them to the max, remortgage there house, buy flash cars on HP, so these people deserve what they get, it`s these people who have problems because of the rest of there debts payable each month

Answer 16

Of course I feel sorry for them, these young people may have over stretched themselves but at least they are working and trying to better themselves. I would rather help them out financially then pay the benefit breeders who get accommodation free.

We took a gamble 15 years ago and we are now mortgage free at 40 sometimes you just have to take the plunge.

Answer 17

Yes because there for the Grace of God go I.

I have little sympathy for the banks who have deliberately let people who they full well knew would not  be able to pay their mortgages if there was an economic shiver, but they were banking on making a tidy profit on foreclosure. When I got my own loan I almost had to prove I did not need one. This was called responsible banking and was the cause of a terrible disappointment for which i truly thank them. In your case with the downturn in property values it is perhaps wise for you not to buy but the time will come when that is a proper option. Then you will know the icy fear of losing your job and the home of yourself and your family  when there is a slump      

Answer 18

Some people I can feel sorry for, not the ones who have been trying to live above their means and be something that they are not !

Answer 19

No we shouldn't. Neither should we the 'taxpayer' be expected to bail them or the banks out. Noone held a shotgun to their heads to make them sign the mortgage form so they should accept they were very stupid and deal with the consequences of their own mistakes.

Answer 20

Yes we should feel sorry for them, all they did was make a wrong decision.

You want someone to blame blame the banks who lent the money in the first place.

Oh to be as perfect as you lot, I really hope you don't lose your job and end up losing your house because the payments have gone sky high.  Show a bit of compassion to mankind.

HAZ - Well said mate!

Answer 21

Well no not really.

They probably lied to the bank about their incomes anyway to get a higher loan.

Always live within your means.