We have this in the UK. The courts usually suspend repossession on condition the borrower pays the monthly payment plus an amount off the arrears - often just a token sum, £10 or so - for three or six months. But the courts can't suspend the payments altogether.

Some mortgages allow for 'payment holidays', but these aren't usually granted if a borrower is already in arrears.

I can see a horrible crash coming in the UK. There are far, far too many new flats being built that nobody will be able to afford. And if the first-time buyers can't get onto the property ladder, nobody else will be able to move.

All around my office blocks and blocks of flats are being built. The only one that's complete, Discovery Dock, has half its 350 apartments lying empty. Across the road from my office Pan Peninsula is being built. Nearly 800 apartments of varying sizes, with prices ranging from £784 per square foot for a studio flat. Yes, that's right, around $1500 per square FOOT.

A few hundred yards away Baltimore Wharf is being built by the same developers. Another 1,000 apartments at similar prices. I can't imagine who will buy them when the ones already built have no buyers for them.

Yet still they build and build ...

I actually went to look at a house the other day. So tempting... in my area, the mortgage would be less than my rent. But, three days later my company had a ton of layoffs (not me, thankfully), so I think I will hold off on taking on any debt until I'm less worried about joining the ranks of the unemployed.

You know, so long as I can still find a bank willing to give me $70K if this passes.[1]

[1]is there a general guideline for home price as compared to income? Like, same as, double, etc? I was preapproved for an obscene amount I want nothing to do with (like, four times my annual income), so I'm wondering if I'm being too conservative.

kellydamnit: in the UK, the prudent lending criteria used to be no more than 3 x income. Then over the last 10 years or so people have been able to borrow stupid amounts, like five or six times income.

On paper the borrowers can afford it on a short-term fix - in the UK our mortgages are generally not fixed rate for the full term of 25 years but are fixed for shorter periods of 2-10 years at the start of the term, after which the borrowers are free to shop around and re-mortgage to another lender offering a better deal. Inevitably there are fees involved, especially if you want to re-mortgage before the expiry of the fixed term.

Big problems are now arising as lots of people come to the end of their two or three year fix, looking to re-mortage and finding that they (a) don't meet the new stricter lending criteria that are now in place and (b) they can't afford their existing mortgage when the payments to up to the lender's standard interest rate when their fixed term expires.

Result = more repossessions.

I've always been very prudent in my mortgage borrowing, never borrowing more than 2.5 x salary. I re-mortgaged nearly 2 years ago, with the first 5 years of the 16-year term fixed at a low rate. I'm lucky, I'll ride out this latest credit crunch as I have no other debt. Many people will lose their homes.

Be prudent, kellydamnit, and you'll be ok. If your gut's telling you you can't afford it, go with your gut. Factor all the extra costs a homeowner has that a renter doesn't - property insurance, repairs and maintenance, taxes, utilities - into your monthly budget when working out how much you can afford.

I can see a horrible crash coming in the UK. There are far, far too many new flats being built that nobody will be able to afford. And if the first-time buyers can't get onto the property ladder, nobody else will be able to move.
The same is about to happen here, for similar reasons, except it's houses, not flats. It's not that people can't but them, because they are being snapped up faster than they can build them. The problem here is that people are borrowing more than the homes are worth and getting sucked in by package deals offered by certain building/finance company arrangements set up to prey on those who can't get into the housing market any other way. These people are signing mortgages for up to 110% of valuation, using the extra money to pay off other debts (so they can meet the lender's criteria) and banking on property price increases to save them if they have to sell.

This has been fine for the last five years or so, but now the market has stagnated in the face of interest rate increases and the change of government. People are getting scared and trying to get out, only to find that their house is now worth far less than their mortgage, so they have no way out except bankruptcy. The lenders won't let them sell because they lose their security and the house ends up being sold at fire-sale prices so the lender can get some of their money back (mortgage insurance - which the borrower paid for, even if they don't know it, picks up the shortfall). If this starts to hit hard, property prices will start to fall, leading to a spiral that feeds on itself.