Dear listener

In 1806 Thomas Wildes bought a parcel of land in Kent with £2000 he borrowed at 5% off a consortium of five men from Kent and London. By 1828 he was so behind with the interest – which by then amounted to £1360 – that the lenders seized the land. Thomas was allowed to continue to farm it and a couple of years later his brother Henry bailed him out, paying off the interest and some of the capital. Henry split the land in two and in 1833 built a house on each. He lived in the bigger one and sold the other. Debt paid.

I mention it because as I transcribed this fascinating story from the original parchment deeds this week (the smaller house is owned by a relative who has the documents) I was struck by how commercial life has changed. Unlike banks today Messrs Parker, Smith, Wise, Baker, and Foord of Kent and London kept the debt rather than selling it on to someone else, claiming it was safe, as banks today would have done. They enforced their rights to possess the land but did not evict the defaulter, as banks and building societies would today. And a couple of years later they did a deal with his brother and got all their money back and the interest over the next few years. Problem solved. Everyone happy.

** (asterisks indicate items in the programme) As I write we simply don’t know if the politicians in America will or won’t agree to commit $700 billion of their voters’ money to buy the debts the banks sold to each other without being clear about how risky they were. And we certainly don’t know what will happen if they don’t. Or indeed if they do. Strange times. Hear the latest live from an investment analyst in the USA on Saturday. By the way this week another bank called Washington Mutual – the biggest yet – failed and was bought for a bargain basement price by rival J P Morgan, which also bought Bear Stearns at the start of this game of Last Bank Standing.

** The brief time when mortgage rates were falling has now ended – as we predicted it would last week. Three lenders put up their rates today. So are all rates rising? If not which are and why? And where will they go in the next few weeks? The latest mortgage news live on Saturday morning.

** While some people worry whether their mortgage rate is 5.49% or 5.99% others are borrowing money at 1069% APR. Doorstep lending – and doorstep repayment collection – is growing as the banks pull down the shutters on people with poor credit histories. This week a new website is launched where you can see the best deals. I need £200 over 40 weeks. Should I go for this loan at 440.3%? Or, no, wait a minute, there’s a bargain here at only 281.5%!

** People trapped in their homes by remortgage arrangements done in the late nineties with Barclays and Bank of Scotland have been told the original contracts may now be unenforceable. They borrowed 25% of the value of their home in a form of equity release. No interest was charged but the bank got 75% of any capital growth when the home was sold. A new consumer credit law means this deal can now be challenged. But it will cost the victims of these Shared Appreciation Mortgages £5000 each to go to court to do so. And they may not win the case. Good idea? Or good money after bad?

** Should students already burdened with a five figure debt from their time as an undergraduate borrow more money for postgraduate studies – at 12.9%? We look at career development loans and ask why the Government doesn’t include them in the student loan system.

(**) There’s a couple of other things bubbling under and may squeeze their way in – or even biff out some of those listed above. To find out what makes it and what doesn’t listen to Money Box which is live on Saturday at noon and repeated on Sunday at nine pm. And there’s a podcast, Have your Say, lots of links, previous programmes (with transcripts), video to watch, and loads of other stuff on our developing website bbc.co.uk/moneybox.

Best wishes

Paul

PS Don’t forget the programme taster on BBC Breakfast between quarter to nine and nine o’clock. If you miss it, you can watch it on the web until Wednesday after which it will be replaced with Samantha Washington’s weekly round up of the money headlines since we were last on air.

PPS Some of you have asked why the newsletter for Money Box Live next Monday goes out before the newsletter for Saturday’s Money Box. That’s because we know what’s in Money Box Live some time before. But Money Box is a news programme and develops right up to the pips at twelve, live on Saturday!

e-mail Paul Lewis