I found this report very disturbing...
http://www.huffingtonpost.com/2008/03/20/bbc-report-sheds-light-on_n_92548.html
http://www.huffingtonpost.com/2008/03/20/bbc-report-sheds-light-on_n_92548.html
BBC report on sub-prime, tent, shantytowns
- Thread starter metric
- Start date
tech/a
No Ordinary Duck
- Joined
- 14 October 2004
- Posts
- 20,417
- Reactions
- 6,356
Wrote this up on another forum.
Under the title.
Shared Equity Loans---An Answer To Affordability
There are lights at the end of tunnels people just have to shift their focus from doom and gloom to innovative thinking for THIER situation.
There are 2 banks I know of who offer Shared Equity Loans.
Commonwealth and Adelaide Bank.
First presented in times of massive growth, purchasers didn't embrace the idea--and nor should they---- as Capital appreciation far out weighed the interest saving.
However now with subdued growth higher interest rates and in some areas negative growth--this product could be just what the doctor ordered for those who wish to get in the market---are concerned about serviceability yet wish to keep ahead of inflation.
For those not familiar with Shared Equity this is how it works.
Not available to Investors.
Min deposit 5%
Maximum Equity loan 20% of purchase price.
Normal home loan on 75%
At time of re finance or Sale of the home the Equity Lender is paid 40% of the equity appreciation.
I also see this as an opportunity for those heavily in to Consumer debt who re finance card and other debt into their home.
With proper guidance the excess savings generated by debt consolidation and Equity Mortgage could see accelerated savings which in turn could lead to further refinancing an much better gearing in the future.
Obviously there is a point where capital growth will exceed the savings in interest.
I wonder how long this product will be available as prices decrease to levels which aren't as favorable to the lender.
I see it as a form of wrapping for the financier.
I'm investigating some form of similar Vendor finance arrangement which may be beneficial to both purchaser and Investor alike.
From the angle that some long term investors have a great deal of increased equity in property which could be locked down and not being utilised.
Interested in discussion.
Under the title.
Shared Equity Loans---An Answer To Affordability
There are lights at the end of tunnels people just have to shift their focus from doom and gloom to innovative thinking for THIER situation.
There are 2 banks I know of who offer Shared Equity Loans.
Commonwealth and Adelaide Bank.
First presented in times of massive growth, purchasers didn't embrace the idea--and nor should they---- as Capital appreciation far out weighed the interest saving.
However now with subdued growth higher interest rates and in some areas negative growth--this product could be just what the doctor ordered for those who wish to get in the market---are concerned about serviceability yet wish to keep ahead of inflation.
For those not familiar with Shared Equity this is how it works.
Not available to Investors.
Min deposit 5%
Maximum Equity loan 20% of purchase price.
Normal home loan on 75%
At time of re finance or Sale of the home the Equity Lender is paid 40% of the equity appreciation.
I also see this as an opportunity for those heavily in to Consumer debt who re finance card and other debt into their home.
With proper guidance the excess savings generated by debt consolidation and Equity Mortgage could see accelerated savings which in turn could lead to further refinancing an much better gearing in the future.
Obviously there is a point where capital growth will exceed the savings in interest.
I wonder how long this product will be available as prices decrease to levels which aren't as favorable to the lender.
I see it as a form of wrapping for the financier.
I'm investigating some form of similar Vendor finance arrangement which may be beneficial to both purchaser and Investor alike.
From the angle that some long term investors have a great deal of increased equity in property which could be locked down and not being utilised.
Interested in discussion.
- Joined
- 2 February 2006
- Posts
- 14,009
- Reactions
- 2,893
Thanks for the thread as I've been following this for quite a while.
The U.K. has problems as well in the development market where 125% loans have become increasingly commonplace in the improvement market - now stopped completely. Now it's 75% and the crunch is being felt.
The US problem is now so difficult that the eventual loss outcome may be between $1.2 to $2.4 trillion.
How can anyone really value so many of these Banks? The only big asset is often a mortgage loan book that is so complicated that experts give up and walk away.
All very sad where people are basically conned in the buying of the most important asset in their lives.
People often talk about higher living standards in the U.S., Canada and U.K., however, from what I've seen its a trust no one situation. The bigger the company, the bigger the crook.
here is an article that asks basically what you are saying.. except now we have the; "plunge protection team"....
http://www.marketoracle.co.uk/Article4074.html
aparently shantytowns are about to get a whole lot bigger.......thanks to more religious extremism, GW. in 30 years, no less...
http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id=541748&in_page_id=1770
http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id=541748&in_page_id=1770
theasxgorilla
Problem solved... next bubble.
- Joined
- 7 December 2006
- Posts
- 2,343
- Reactions
- 1
Two things....why don't you hear what he sold it for? That snippet of footage looks cut to me. Makes me suspect of the reporting and the angle being presented here.
On the question of, what if there was a depression and no-one told...no need to wonder if America is capable, just look at New Orleans.
On the question of, what if there was a depression and no-one told...no need to wonder if America is capable, just look at New Orleans.
