Collapsing house prices are plunging 60,000 homeowners a month into negative equity, which means the country is on course for a worse crisis than the 1990s crash.
At current trends, 2m households will enter negative equity by 2010, outstripping the 1.8m affected at the bottom of the last housing slump.
New research from Standard & Poor’s, the ratings agency, coincides with evidence that banks are aggressively seizing homes whose owners have slipped just a few hundred pounds behind on their mortgage payments.
I don’t understand this at all. Why would a bank seize a house it really doesn’t want and which it must sell at a loss, when a little patience would allow the present homeowner to catch up with his payments – or even to forgive those payments so that the homeowner could CONTINUE to pay the bank -which is what the bank should really favor. A bank isn’t a real estate agency after all and surely doesn’t want to be. Fior a bank to be so precipitous does not seem to be in the bank’s best interest. Larry