Graham Murray wrote:
> Papadillos writes:
>
>> The banks' increasing concern about the risks of the implosion of
>> Britain's £1.4 trillion debt mountain has led to a huge surge in the
>> number of court orders moving unsecured debt on to a basis that secures
>> it against a borrower's home.
>
> Maybe someone needs to remind the banks of the old adage "you cannot
> have your cake and eat it". Either the banks should charge higher
> interest rates, as they do on credit cards, for unsecured loans and
> accept the accompanying risks. Or they should make the loans secured and
> charge lower interest rates commensurate with the lower risk. They
> should not be allowed to have it both ways.
They will presumably charge a lower rate once the loan becomes secured.
The higher rate is still justified before this step is taken.
After all, the process of moving the debt from unsecured to secured
status will involve the bank in a court action to obtain the charging
order, and court action is never cheap.
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