It could be a couple of years before mortgage freeze thaws out
September 1, 2008
The mortgage industry has been going through turmoil for close to a year now, with the global credit crunch resulting in radical changes being made to the mortgage market. The number of mortgages available have been radically reduced over the past year, and tighter credit conditions from lenders have resulted in decreased accessibility when it comes to getting a mortgage, making it difficult for consumers to get a mortgage, and resulting in the wheels of the mortgage industry all but grinding to a halt.
Unfortunately, the end of the mortgage turmoil is not yet in sight, and one official who has been appointed to look into liquidity in the mortgage sector has said that the mortgage freeze could continue next year and into 2010, which means that the problems could continue for another couple of years. This means that lenders could still find it hard to get funding to finance their mortgage lending operations, and many consumers could continue to find it difficult or even impossible to get a mortgage in the difficult climate.
Sir James Crosby is the former chairman of HBOS, and he has recently put together a report that indicates the mortgage sector problems are set to continue over the next couple of weeks. He has been appointed by the government to explore the problems with liquidity in the mortgage sector, and also to make recommendations with regards to easing the ongoing issues in the mortgage market. He is expected to release a further report in the autumn, outlining the problems and providing recommendations.
Whilst the government has recently launched a £50 billion mortgage rescue plan, many industry officials have said that this is going to take some time to have a positive impact on the struggling housing market, which means that for the time being both lenders and consumers will have to cope with the continued problems.
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- Rise in repossession orders According to a recent report there has been a significant rise in the number of repossession orders being filed. Another report has already shown that there has been a rise of 41% in actual repossessions
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