Tuesday, Apr 10, 2007
Looks like the FSA are getting the jitters about UK subprime
BBC News: Sub-prime loans in the spotlight
The City watchdog is to investigate whether "sub-prime" mortgage borrowers with poor credit histories are being treated fairly by lenders.
Posted by mr cobblepot @ 12:57 PM (161 views) Add Comment
7 Comments
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1. Sam said...
I guess if they were buying a house to live in then the FSA should do something; if they were BTLers then it was the risk they ran and should have known it.
2. p. o. o. r said...
Great that the city watchdog is going to investigate the 'sub-prime' market, but what about investigating the prime market and what happens with all these "Interest only" mortgages, and 5 times salary plus Mortgages, and 50 year mortgages - surely these should also be investigated. If prices drop by only a couple of percent so many people are going to be trapped and unable to move house. So in another 10 years time we are going to see so many legal cases of people suing for misguided information. History has shown us that even in the old days of the traditional 3*, and 25 year deals, a lot of people can still get into trouble when the going gets tough - It scares me what the market might be like in 10 years from now. How much are taxes going to have to be increased to pay for housing for those people who have been evicted or had the home repossesed. What happens if the market does crash by say 25 percent - A 300K house is now worth 225K - Interest only mortgage means £75K still owed... Interest rates go up to 10 percent - monthly mortgage based at 5* salary is more than income received.... What a Big mess it going to be... and who will have to bail the market out?
3. Tipping Point said...
P.o.o.r. It's inflation you should be worring about. No independent or political body is going to deliberately make a large part of the population homeless. For the reasons you mentioned, they are pretty much limited to increasing rates to 7.5% regardless of what inflation does. Ultimately inflation will eat away at house prices faster than at wages and we'll be able to start the 30 year cyle all over again.
4. lvmreader said...
It's ALL Subprime, you dumb FSA schmucks
5. paul said...
The city watchdog stepping in to do far too little far too late is no accident here.
6. Scott said...
P.o.o.r. I think your sympathies are misguided here. Someone with a 300k mortgage having their property going down to 225k. I tend not to feel sorry for people who can afford 300k mortgages. Rather like these millionaires in central London who say that bidding for their desired homes is proving very stressful for them. I would laugh if I was not so worse off.
7. paul said...
Lets face it, its the government trying to step in to patch up the ever increasing number of leaks in the property bubble.
History will remember their efforts as failures.