Mortgage Rescue Schemes, failed policy.

Internationally mortgage rescue schemes have been an abject failure from the perspective of using the success of their mission statement and intended scope as a gauge.

In researching this blog I spoke to representatives from The Association of Mortgage Intermediaries in the UK, the Mortgage Bankers Association of America, and Loan Value Group, they all had similar sentiments on rescue schemes to date.

The ‘Homeowner Mortgage Scheme in the UK planned to help 42,000 borrowers when it was set up in early 2009, to date it has helped 34. That is less than 1:1000 of the intended group.

Mortgage Rescue Help was another plan in the UK, that was meant to assist about 6000 in the short term, the actual figure as of Q3 2010 was 629 or about 1:10 of the intended target group.

In the USA the ‘Home Affordable Mortgage Programme’  (HAMP) was aimed …

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‘Plan B’ for arrears

There is a strange situation occurring in the Irish property market, arrears are rising rapidly, stock of repossessed homes is on the increase, and yet the number of repossessions is dropping; there is a contradiction in here somewhere.

Per quarter the number of properties being repossessed is dropping, banks are taking back fewer and fewer houses, this would normally be a sign of prosperity, people with jobs and a stable property market would mean that there would be some equity in the property as people pay down debt and are able to afford their payments, but that isn’t the case, quite the opposite, Irish households are heavily indebted and arrears are rapidly rising.

The largest number of properties being taken back is actually that of voluntary surrender (and abandonment), so there is no ‘repossession’ monster lurking in the Irish market because we have decided that we don’t want it to exist, this will come at a cost as we incrementally strip banks of their ability to enforce mortgage contracts.

The stock of property …

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