Did you borrow money when you knew you couldn't afford it?

[jrussel]

And if so, do you feel guilty now?

Everyone is blaming the bankers for the credit crunch and fair enough, they should take some of the blame for lending to people who were not intelligent enough to understand their ability to repay their debts, and taking advantage of them, but surely some of the blame must be taken by people who were just greedy and borrowed more than they could afford?

[Huguenot]

I'm not sure you understand the situation, as your question misses the point.

People borrowed money in what had been a sustained period of high economic growth and low credit costs. When people borrowed money at these rates they could afford it, and expected (and were supported by financial companies in collusion with this belief) that the positive financial outlook would continue.

The damage is being done to borrowers returning to the market as their deals conclude, and finding that new deals are much more expensive and for an expected 1% of individuals may be beyond their means.

This is nothing to feel 'guilty' about, no act of criminal intent had been committed. In fact it's very sad for those affected. There's a suspisciously crowing tone about your post which seems deeply unpleasant.

There may have been the odd spiv who attempted to deliberately defraud the market, but you won't find them by tossing sweeping accusations out in public forums, and they won't feel guilty (trust me).

[SteveT]

Bankers (Northern reck) were buying short and selling long.............. a very basic banker's rule was broken there.

After a while, doing this has long term repercussions, it cannot be sustained.

Perhaps in the future rates might be fixed for the first half of the mortgage period.

When embarking on a loan as important as your mortgage it should be much better protected for the individual, to avoid an excessive amount of fore closures.

[ratty]

I am personally shiteing it because my deal is up in March and because of the fact that we now have a child, my missus will not be going back to work full time. We would have no problems if we were both f/t and not shelling out for nursery but we might very well be in trouble come March! There is about ?80 slack in the family budget each month with my mortgage (not on a deal) due to go up by about ?400) Oh Dear!

[jrussel]

I'm not accusing anyone of defrauding the market ... just wondering if some blame shouldn't be attributed to those who borrowed beyond their means. I mean everyone knows that interest rates can go up as well as down, don't they? Shouldn't we expect people to be intelligent enough to realise this?

You could argue that ultimately, what will happen to someone who has taken on too large a mortgage, will have to sell back their house and go and live somewhere smaller/not as nice. Which is where they would have been living anyway if everyone had been a bit more realistic about things over the past few years.

"When people borrowed money at these rates they could afford it, and expected (and were supported by financial companies in collusion with this belief) that the positive financial outlook would continue."

Of course, they were in collusion with the financial companies in these beliefs. What I am really saying, is that if we are going to blame the bankers for being deluded, then why should different rules apply to the borrowers? The only defence is that bankers "ought to know better". But at the same time, we currently have lots of people saying it was obvious that it couldn't last and taking a "told-you-so" attitude. Well, if it was so obvious, why did so many people take out big ,mortgages?

[ClareC]

How do you judge "beyond their means"? Interest rates can go up and down but how much fluctuation skyward is reasonable to expect and ensure you can afford?

I would agree that interest rates rising 1 or maybe 2% should be anticipated, however, if they were to increase to the rates seen in the 80's I suspect a large percentage would struggle, including those with relatively small mortgages.

[Brendan]

Don't bite Clare. He's just trying to cause trouble.

[Cassius]

No I didn't.

[pk]

so essentially this thread could be titled - "is your house being repossessed?"

"and if so, do you feel guilty now"

i guess that anyone who's house is being repossessed has more pressing problems then feeling guilty about the plight of their lender

[Tony.London Suburbs]

ratty Wrote:

There is about ?80 slack in the family budget each month with my mortgage (not on a deal) due to go up by about ?400)

Oh Dear!

Sorry to hear that M8...look I'm also in need of "readies" now.

Can you drive fast?

Just that I'm getting a "Team" together at the moment for a little Business proposition.

Interested?

[paragon]

you should rob jrussel of his troll mask so we can get a view of what he actually thinks when not trying to be inflammatory.

[AcedOut]

jrussel clearly doesn't understand the problem. Probably doesn't know the difference between leverage and liquidity or a CDS or a CDO. Don't take the bait!