Repossession
How many repossessions are the credit crunch going to cause? Of course we dont really believe all the hype the media has been trying to propagate, but with a drop in house prices comes negative equity which is where repossession comes in. While the recent developments in finance, and mortgages in particular, have tried to deal with overpriced and overvalued property paid for by over mortgaging property there are still plenty of people who face having their homes repossessed.
It goes without saying you should think twice about overmortgaging your property, not taking out remortgages without good reason, paying more than a property is worth and over stretching your finances in other areas. If you do get into trouble then the first stop should be to rationalise your finances and obviously get in touch with your lender stating what your position is. Even after repossession proceedings start you can claim the property back during negotiations between lenders and borrowers. While lenders can make money back from repossession these are bad for business so they try to keep these to a minimum. The recent developments in the US finance industry have been as a result of stricter regulation of borrowing and have led to the end of 100% mortgages and many special deals that were offered.
Buy to let borrowers can even be hit with top up payments to keep their borrowing at a certain percentage of the total value and this is pricing many out of that market