Your tiny impotent mind fails to see that equity is nothing more than a hypothetical value based on current economical circumstances, what number would this 6.8% turn out to be if prices fell 5% or 20%? What if they fell 30%, are we looking at 50% with no or negative equity?
Your cognitive deficiencies amuse me
Chris, let me spell this out so simply that even a self entitled pathetic whiny bitch like you should understand.
Today I own 5 properties without debt. 4 provide current income. 1 provides current shelter.
If the value of those properties collectively fell tomorrow by 20% the I lose a hypothetical $1m, but I still have $4.3m in current hypothetical value that is still 100% equity. And 4 of the properties will still deliver income, while 1 will continue to provide shelter.
My tenants on the other hand have $0 equity in housing. No matter prices rise or fall, their real housing equity remains exactly the same. $0.00
You can claim they have other investments, and they may. But so do I. And so do most other property owners.
I know you are trying to make a point. Sadly for you, you didn't.
My only hope for my three boys is that they turn out nothing at all like Chris.
Given they say it dropped by 1% since 2012 despite the property boom would be fairly worrying. Surely it should have dropped considerably given the price rises in the last 3 years?
6% is bugger all, and this "little or no equity" is nothing more than a hypothetical value based on current economic circumstances.
What number would this 6% turn out to be if prices rise another 5% or 20%? What if they rise 30%, are we looking at 0% with no equity?
Probably 10%. The fastest way to put someone deeper in debt is to give them a pay rise since most people in debt spend beyond their income, whatever it is. If prices rose, people would just assume they have more money and trade in the Audi for a BMW.
"Little or no equity" means zero margin for error. Any period of unemployment will result in foreclosure. They should never have been given a loan. It's predatory lending at its worst. In fact, its fraudulent conveyance. If a borrower can reasonably prove there's no way they could pay back the bank with the loan they received, they can be relinquished from ever having to pay the loan back at all.
Any period of unemployment will result in foreclosure.
Not really - there are hardship provisions, and banks will normally agree to a mortgage holiday for at least six months. Very few would end up in foreclosure - i.e. just the small proportion of people with negative equity who lose their jobs and are then unable to find a new one for 6+ months. Anyway, the good news is that the unemployment rate fell to 5.7% last month and house prices are rising, not falling.
Probably 10%. The fastest way to put someone deeper in debt is to give them a pay rise since most people in debt spend beyond their income, whatever it is. If prices rose, people would just assume they have more money and trade in the Audi for a BMW.
"Little or no equity" means zero margin for error. Any period of unemployment will result in foreclosure. They should never have been given a loan. It's predatory lending at its worst. In fact, its fraudulent conveyance. If a borrower can reasonably prove there's no way they could pay back the bank with the loan they received, they can be relinquished from ever having to pay the loan back at all.
The last thing a bank wants is people getting kicked out
Besides, they'd be shipped off to the mortgage insurers before then?
For anyone interested in further data and material regarding arrears some suggestions follow - don't know if these are listed in other places - they are not included in the Free Reports, Data, Blogs, Forums, Prices, Auction Results sticky thread - maybe they can be added to that sticky?
Recommended search term: SPIN Standard and Poor's Arrears Index
The SPIN is a weighted-average performance index of all Australian prime RMBS transactions rated by S&P Global Ratings that are in arrears by more than 30 days.
Another good source of information are bank capital adequacy reports, e.g. APS 330 Public Disclosure statements which will also appear under title Basel III Pillar 3, you may be able to glean some information from provisions and write-offs, relevant sections of bank results presentations are good too if you like pictures: http://www.asx.com.au/asxpdf/20170509/pdf/43j3x9zg55fgmz.pdf
Browse through Standard and Poors releases under their Structured Finance section - Fitch Ratings and Moodys probably have similar report sections on their websites: https://www.spratings.com/en_US/structured-finance
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