Wednesday, Feb 13, 2008
Mortgage lenders are becoming increasingly concerned about the looming shortfall in funding
Citywire: Mortgages: Waiting for the big liquidity freeze to thaw
Mortgage lenders are becoming increasingly concerned about the looming shortfall in funding. The Council of Mortgage Lenders (CML) is lobbying the Treasury and Bank of England to help solve the liquidity problem in the hope that the securitisation market, on which many lenders rely, can be reopened. The freeze has already taken out buy-to-let lender Paragon and there are fears that the continuing shortage of funds will create problems, not just for homebuyers (and sub-prime borrowers in particular), but for everyone as it spills over into the wider economy, precipitating a general slowdown if not recession
Posted by jack c @ 09:17 AM (328 views) Add Comment
4 Comments
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1. hpwatcher said...
BoE should tell them to eff' off. They simply haven't been running their business correctly.
2. Realist said...
However did the housing market survive in this country pre-securitisation? If they can't securitise then mortgage lending will get tighter and pricing and terms squeezed - good old supply and demand. What the CML are really saying here is can the govt sort out some wheeze to get the merry go round going again as otherwise house prices will fall back into line with sensible lending practices.
3. inbreda said...
Damn right realist - if they can't handle supply and demand we're doomed. It's socialism being encouraged when the capitalists need a bailout again.
4. lvmreader said...
The label "subprime" is just that. A label. And an especially bad one.
What we face here is a mispricing of risk. Period. Especially to those who are "over-levered"
The idea that "unemployed black men in string vests sitting on a porch in Alabama" are the root cause of this is nonsense. That segment of the market was always dwarfed by the so-called "middle classes with good-credit" who just wanted that bigger house, better car, more exclusive holiday and more nights out at restaurants.