Then There Was None

With hindsight any fool could see that the property boom had to burst.Before the bank would give me a mortgage I was summoned for a “chat” with the branch manager.
”Perhaps we should go over some insurance quotes,” he suggested. Well he made it sound like a suggestion.

The Options Were Few

Well my choices were few. Correction, I had only two options and one of them meant no mortgage. I was young and naive so I accepted the terms and signed the paperwork. If it all went pear shaped I had the insurance as backup. So why worry. I want to know if I survived this financial mess. You can go to mortgage insurance and read how it all works out.

You need to check carefully how much cover your insurance policy provides.Don’t just take the sales persons word for it. Get it in writing and seek advice if you are unsure where you stand. It’s not that I am totally against insurance but many policies seem to have so many get out tactics built in to avoid paying out. You can find further advice on insurance and general buy to let mortgages on the Hayes Mortgage Solutions website.

My 7.5% mortgage very soon increased to a massive 16%.Ouch! Yes it really did hurt, in more ways than one. What do you do when your mortgage payments double but your income stays the same.And when you have the very real possibility of unemployment too.

It’s vital to stay calm. Contact your lender and keep them informed of your financial problems. And remember that you can recover and buy another house.

Find My Story Too Hard To Believe?

So if you reach court stage and the mortgage company are asking for possession what do you do? Now I could have tried positive thinking to get me out of this mess but there’s positive thinking and there’s the debt that mounting while you practice thinking positive thoughts. All the time with one eye on the increasing balance. The negative balance. The one I would have to pay back. And who knows how long this will last. Could I actually end up bankrupt? At this point I’m still only twenty one.

Mortgage Hell

Needless to say many sleepless nights followed. And what sleep I did get was far from enjoyable. It almost seemed easier to stay up watching late night TV. Anything to keep from allowing my mind to visit my mortgage hell.

Quick Get Out The Insurance Policy – We need IT!

So did the insurance save me? Did it hell. The insurance it turns out was to protect the bank not me. It covered the banks cost of repossession my home! And that wasn’t the end of it either. Having repossessed my home the bank proceeded to sell it at auction far below market value. They then pursued me for the shortfall, some sixteen thousand pounds.

So I paid for the insurance and the bank got protection. You work it out.

A very few did say that they thought that the sub prime lending would have consequences, but they did not forecast in what manner. They mostly said that it would affect a few banks, but never did they say the entire system would melt down.

It’s ironic that almost twenty years ago, in the late 1980’s, that there were a load of books and financial gurus who predicted the next Black Tuesday and Great Depression, and of course when that didn’t happen, they fell out of favor.

The Panic of 1987, which drove stocks down then over 500 points, was an enormous percentage point drop, but now drops like that are happening daily.

Of course, the banking and finance system has not quite melted down. Nobody really knows how bad it is.

Yesterday, Hank Paulson, forced some of the largest banks to sell stock to the federal government. Some of the banks objected, like Wells Fargo, as they were not in trouble, had a strong balance sheet, and did not want the federal government owning such a large voting block of stock. There were clearly some shotgun weddings.

None of this is restoring confidence. Bad news continues to flow in across the world. Yesterday the bad news came from Switzerland. Both large investment banks there, Credit Suisse and USB, have been nationalized.

This is Switzerland — home of the Swiss bank! These banks survived the Great Depression and World War II. Now they’ve been done in by a bunch of lower income Americans and the banks and the politicians that caused this mess.

I’m not sure what can be done. If trading is halted on the exchanges, it would probably only be a break in the carnage.

If the government got out of the way, the markets would totally collapse, which may happen anyway. If that happens, real wealth will be lost, but others will step in to buy. There is money out there — waiting.

Today and tomorrow will be fascinating days, to say the least. If the market goes below 8000, then we may see another rush to sell, people moving out of mutual funds and into cash, and people and institutions stashing the money in the mattress, so to speak.

Each day is something new. I wish it weren’t. Being my own stock broker certainly presents me with some challenging times.