mortgagee possessions skyrocket, page-6

Montec - that's all well and good to say that when there are only a small number of repossesions/sales through mortgage auction.

Simple economics tells us, holding all else constant, if there is an increase in the Supply of houses for sale and Demand for houses remains constant, price will decrease. Shock horror, falling house prices.

I assume that if the bank doesn't get all of the mortgage value back through the auction, the mortgage holder will be liable to pay even if they file for bankruptcy -- a long and expensive process. And at the same time, if the new purchaser of the auctioned house chooses to take a mortgage through the same bank, the new value of the mortgage is lower than the previous mortgage, so for that particular case there would be negative credit growth. Not good for banks.

Imagin this happening on a massive scale. If we see a few more rates rises there are going to be some serious problems. I have friends that rushed out to get the First Home Buyers grant, paid a bucketload for their house, and they are barely able to afford their mortgage now. If in the unfortunate event that they lose their job or have some unexpected bill etc they are going to be in some serious trouble. And let me tell you, being part of Gen Y - I personally have a bunch of friends that are in that very situation. It boggles the mind to think of why they put themselves in such a position, but that is the current state of play...

-- if any of that economic/mortgage consequence stuff is incorrect feel free to correct me!