What would happen if every1 agreed 2 stop paying mortgages & homes were repossessed with higher intrest rates?

Question

The bank of England keep increasing interest charges to borrowers, wages are not going up in line with this, fuel charges are increasing, council tax will no doubt increase in April so if everyone who has a mortgage stopped paying, what could the lenders do? They wont be able to repossess all the houses of people who have not paid their mortgages etc!

Answer 1

Rates typically go up to control the market, not to make mroe money. If the market is growing to fast, they incease interest rates to slow inflation. If people stopped paying, everyone would probably lose their saved wealth in banks, since they nly have to have a certain portion in cash; the rest can be loaned out. Overall, it would detroy the economy. The market has a tendency to correct itself. People will stop buying houses, or they will bild smaller houses if rates go too high, so it makes sense for banks to keep rates reasonable. At the same time, very low rates can create a rush on the building market, and people will refinance at high rates. This creates an infulx of money intot he market, since bank loans are overall unminted money with little to back them. This is detrimental and will only cause prices to go up, while the wage earner's salary does not increase. I hope I answered your question.

Answer 2

they would most definitely repossess all of the houses where the owner will not pay the mortgage. if no one then bought them again, it would definitely cause a crash on the money markets and ruin the economy.

i live in the USA and do not know what lending practices are like in the UK. but i do know that if the USA money markets collapsed (and UK's investments here are a part of our money market) that it would lead to a worldwide depression. that is because all of the money markets in the world are dependant on what happens with ours. we also hold money and assets of different governments (which is why we can impose monetary sanctions on nations such as north korea if they displease us), and we lend out a huge number of dollars to other coutries for development in one way or another.

the way (here in the USA) that lenders are able to give new mortgages is by packaging up the mortgages they already gave into a portfolio which is sold out to investors in the secondary morgage market (pronounced like, but not necessarily spelled this way) such as fanniemae, ginniemae, and freddiemac. the portfolios are sold at a small discount so that the investors funnel money into the lenders and the cycle continues.

if all mortgagors discontinued to pay their principal and interest payments (or even just interest), nobody would want to buy mortgage portfolios and therefore no money would go to the lenders to fund mortgages. foreclosed properties may even just become straight rentals held by lenders, if nobody was willing to buy them.

however, in the case you mention, the value of the real estate would have to go down and down and down so far that properties would be getting sold so cheaply--far less than what the mortgage balances were--as to cause an entire monetary collapse and depression, not recession. because, even when people are not buying and selling real estate but simply refinancing it, we end up living in a recession. that is how important real estate SALES are: they fuel almost all our economy.

i wrote and coded a webpage one time on the real estate industry in the USA, getting data from the last census. when you look at how a hole in the ground eventually becomes improved real estate, considering all elements, including all labor, that go into making the building(s), sales, and closings, you realize that about 28-30% of our gross domestic product (GDP) is related to real estate! gee, if it were to get hit as you mention, all dominos would fall down and i wonder how we would survive? personally i think it could become a complete collapse of society and war in the streets.

Answer 3

Yes they will. Reposess only means that a Sheriff will throw you out of the home and padlock it. Try to bargain with the lender for reduced payments stating why. They may consider restructuring your payments OR allow you to skip one payment to catch up on other things.

Lenders resell mortgages to a large company. Countrywide Funding is the major player in the US. They buy everyone's mortgage around the country from the local lenders. The company has mortgages and investments throughout the country and abroad. Your home and those of others will not put a dent into their overall influx of capital. They will take the slight and temporary loss without missing a beat in their total revenue. They won't let people live for free.

Answer 4

unlawful immigration reasons many issues that's for particular. it is an uncomplicated certainty. Given your estimate of 20 million illegals enable's proceed from there. enable's say even a million/3 of them are retaining jobs. that's merely approximately 7 million human beings interior the paintings rigidity. Contributing to the tax base etc. that could bypass away 7 million interest vacancies. could our u . s . be waiting to handle that many leaving the paintings rigidity? in all danger not. could individuals step into those jobs for the pay offered? in all danger not. agencies final analysis is earnings. could they strengthen wages to get individuals to paintings those jobs? in all danger not. greater agencies could start to outsource. as a result leaving many individuals out of jobs that now carry jobs. Our finished u . s . could fall down and the great melancholy could look as though a cakewalk. As i've got reported unlawful immigration is faulty and needs to give up. yet we additionally would desire to be real looking on deporting as you're saying 20 million human beings. have faith me...that's not going to happen for quite a few reasons. So we would desire to circulate forward and think of of real looking ordinary the thank you to handle the placement to hand and likewise insure the unlawful undertaking is stemmed interior the destiny. greater advantageous border secure practices and visa systems would desire to be dealt with first and maximum familiar so the placement does not gradually worsen. as quickly as the circulate is stopped we are able to then paintings on what to do with those already here.

Answer 5

NO,THEY CAN KICK ALL OF YOU OUT. BOARD UP THE HOUSES. THEN HOMELESSNESS WILL INCREASE WHICH WILL MAKE CRIME INCREASE WHICH WILL MAKE THE ECONOMY BAD. THEN THE CITY WILL EVENTUALLY BE DESTROYED BECAUSE THERE IS NO ORDER. THEN THERE WILL BE NO TOURIST TO BRING IN MONEY. THEN THERE WONT BE NO JOBS. THEN NEWS REPORTERS ARE GOING TO COME AND CALL ALL OF YOU REFUGEES. SO PLEASE PAY YOUR BILLS PEOPLE, IT'S COLD OUTSIDE. GET A SECOND JOB, OR TRICK IF YOU HAVE TO

Answer 6

They would eventually and then they would go and increase the rental prices, There is no way to win this battle unfortunately.

Answer 7

The banking system would collapse. There would be a depression and probably chaos.

Answer 8

Oh yes they would, take everysingle one. All those people would be homeless.