Wednesday, Aug 27, 2008
Shut up, Cable
Daily Mail: Banks should be banned from seizing homes, say LibDems
Banks should be banned from seizing homes from families struggling to pay their mortgages except in extreme circumstances, the Liberal Democrats said.
People would first be asked to sell off a chunk of their property to the local council or housing association under a 'buy back' rescue package.
It would allow cash-strapped families to reduce their mortgage payments without the fear of being made homeless.
The Government should also allow councils and housing associations to borrow billions of pounds to buy developers' land-banks and empty new homes, said Lib Dem treasury spokesman Vince Cable.
Posted by little professor @ 07:30 PM (1368 views) Add Comment
23 Comments
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1. little professor said...
This made me so cross. I want to kick him in the dirigibles.
2. Fly By Night said...
The comments, the introductory subtitle 'Shut up, Cable' and that of 'little professor', are not constructive criticism, and are perplexing since no reason is given for the hostility.
3. mark wadsworth said...
Vince Cable had been emerging as one of the more sensible politicians, but if this is reported correctly he's just as stupid as the rest.
4. plato said...
He said: 'We are determined to do everything possible to promote long-term stability and fairness in the housing market. The international credit crunch has created significant challenges not just for the UK housing market, but in other parts of Europe and the United States.'
You See! They are all quite mad. We're Doomed!
5. montesquieu said...
So much for local accountability - local authorities being forced by government diktat to take overpriced properties on their books, not through some grand plan but just because their owners got into problems.
What are they smoking at Lib Dem HQ these days?
6. scandinavian pessimist said...
This scheme is flawed for so many reasons. Firstly, the banks would suddenly have no incentive to help the mortgage holder by renegotiating the terms of payments. Why would they bother if the council will step in as a last resort anyway? In fact, it may even give them an incentive to start handing out even more risky loans. Secondly, to put tax payers’ money at risk like this would be close to criminal and certainly political suicide after the NR scandal. Thirdly, it is unlikely to solve the fundamental problem that the borrower can't afford his monthly outgoing since part of the mortgage payment will just be replaced by an extra rent payment.
Let's face it, this scheme will never happen.
7. Quad said...
omfg, please let this be a joke, so we will have to bail out greedy home buyers who took out massive loans, and bail out the even greedier banks who loaned them the money, this must surely be a sick joke
8. tyrellcorporation said...
Cable's true colours show though, an economic ignoramus like the rest of 'em. Gawd 'elp us!
9. doomwatch said...
Someones had a quiet word with him. I'm dissapointed.
10. This comment has been removed as it was found to be in breach of our Blog Policies.
11. Peter123 said...
I dont understand this...
I am already subsidising peoples council homes, I am paying £900 / month in rent (about 4 times the price of a similar council property), and being taxed for the privilage to pay for people who want cheap rent in these council houses.
NOW... How is making me (a renting person who cant afford to buy), pay for someone else's property via taxation make it fair?
Maybe I shouldn't have studied and got a degree? maybe I should get a mortgage I cant pay?
Surely paying for everyones council homes is enough? I'm leaving this country before I'm 30.
12. honest valuer said...
if the banks start getting wind that there will be political interference in the repossession process they will probably accelerate arrears cases through the courts and it will also give them an excuse to charge a higher interst margin on new loans. this would only help accelerate the HPC, just like the stamp duty fiasco.
13. str 2007 said...
Taking over then renting back and what is a social landlord anyway.
I'm going to have to take back all I said.
Never mind wasted votes I'm beginning to think voting is a waste of time.
Is there really no person out their who wants to run the country that could actually be trusted to do a good job.
Am I going mad or so far have I actually had the best idea with regard to stopping people getting repossessed and getting house prices back to where they should be. You know, the about the the mortgage shortfall loan direct from the government missing out the banks.
14. str 2007 said...
Apologies for all the spelling mistakes in the last post, I'm very tired.
15. alan said...
The Mail didn't print my comments.
I can't see why greedy people who live beyond their means are not kicked out when they don't pay their mortgage. It's an established principle in this country. This policy is a sure vote loser - wake up Vince!
16. enuii said...
The answer is to ban all political parties and make each mp stand locally on their own merit, once elected, ministers would be drawn from the most qualified for the relevant positions with the prime minister again being voted for in a run off of willing candidates by MP's in the house.
The end of party politics, the end of cronyism and the end of morally bankrupt and self serving governments.
17. japanese uncle said...
Superficial populist policy.
If those silly house buyers were yet again bailed out by the general tax payers, no lesson will be learnt from this sorriest episode.
'Let's gamble on housing again as we all know government will bail out after all' will be the words on the street in say 15 years time.
18. d'oh said...
Oh well, this idiocy has just lost the Lib Dems my vote...looks like the Monster Raving Loonies are the only sensible ones left...
19. icarus said...
If you read Rothbard's 'America's Great Depression' at http://mises.org/rothbard/agd.pdf he makes a strong argument that it lasted so long (all previous recessions/depressions lasted a year, two at most) because the govt kept interfering and never allowed markets to clear themselves. Broons, Cables and Badgers please read it. Depression 'expert' Bernanke should read it too.
20. Grabme said...
Surely its better than allowing the reckless banks to get their money back quickly, letting landlords cash in on those that are repossessed or council house waiting lists going up? Of course there are a lot of greedy people out there that should not have borrowed so much but I think ordinary people that simply needed a home before the millonaires bought out the remaining stock should be be offered some assistance rather than being made homeless.
21. Charliesays73 said...
Just after their reasonably good plan of moving towards a fossil fuel free energy policy, they have come up with this turkey.
22. renting2 said...
What is it about politicians and other peoples' (taxpayers') money?
The only conclusion I can draw is that they truly think that the imminent recession is going to be so deep, so lasting and so damaging to society as a whole that any and every action must be taken to maintain some form of order.
Next phase the herding of single people into multiple occupancy and the handing over of keys of houses to families, based on size?
23. inbreda said...
I wrote to the libdems on this, and fair play to them they responded quickly. the below is the email exchange with my initial email at the bottom:
wrote:
Thankyou very much for your response. I am glad you are not bailing out banks but I would still suggest that you are bailing out what in many cases are greedy people who thought that they would become rich by doing nothing just by buying over priced property.
What happened to personal responsibility?
It is an absurd policy because there are no boundaries to it. Are you suggesting that someone that spread-bet on house prices going up should also be recompensed? Or that of two families in the same position the one that went on 3 holidays in a year and who therefore have no money left to pay their mortgage should be bailed in preference to the prudent family? It is absurd, unworkable, and not what I expect to see from the lib dems. Leave the sound bites to the blues and reds, and stick to sensible policies, please.
You should remember that most of those who are now at risk of losing their homes are the very same people that - not so long ago - were mocking the more sensible people who refused to "buy at any cost" for being mugs. If you try to please all of the people you will end up pleasing none.
--- On Thu, 28/8/08, Liberal Democrat Policy Enquiries
From: Liberal Democrat Policy Enquiries
Subject: RE: Website feedback
To: xxxx
Date: Thursday, 28 August, 2008, 10:40 AM
Dear xxx,
Thank you for your email.
I'd like to take this opportunity to clarify where Vince Cable is coming
from. This is not about bailing out the banks and the Liberal Democrats have
rejected the argument the Treasury should underwrite new loans to support
mortgage lending. We hold the banks very much to blame for the current housing
crisis, having promoted irresponsible lending for years, and now is not the time
to let them off the hook.
Nor are we following Labour and the Conservatives' attempts to artificially
prop up the housing market. The current house price falls are a long overdue
correction to a vastly overvalued market and we have to let this occur.
Government does have a duty, however, to help those at risk of losing their
homes. Often they have been encouraged to stretch themselves to the limit by
irresponsible banks while the entire country was lead to believe that housing
was a safe investment and the risk of negative equity had past.
Vince Cable's strategy is focused on preventing repossessions except as a
last resort. I have pasted the full press release below for a slightly more
balanced interpretation.
Thank you once again for contacting me.
Kind regards,
Kate Webb
Communications Officer
Liberal Democrats
Government must help thousands on verge of repossession - Cable
The Liberal Democrats today set out proposals to help families who are unable
to pay their mortgages and are facing the threat of homelessness due to the
downturn in the housing market.
The plans, which aim to reduce repossessions and increase the stock of social
housing, include:
• Introducing regulated Mortgage Rescue Schemes to allow families struggling
with repayments to sell all or part of the equity in their house and rent it
back from a housing association or private firm to help keep them in their home
• Allowing councils and housing associations to borrow money to buy up land
and empty new homes for use as social housing
• Courts to be given guidelines to only allow homes to be repossessed in
extreme circumstances, making the mortgage lenders' voluntary code binding
on all lenders
Commenting, Liberal Democrat Shadow Chancellor, Vince Cable said:
"The Government seems obsessed with fighting a losing battle to
artificially prop up the housing market, rather than finding ways to deal with
its worst effects.
"Ministers must act to help the thousands of families struggling to keep a
roof over their heads.
"The Government should allow councils and housing associations to buy up
land as well as empty homes to help replenish Britain's much depleted stock
of social housing.
"Ministers must also tighten up repossession rules, to ensure that
people's homes are only ever repossessed as a last resort.
"The Government should introduce regulated Mortgage Rescue Schemes. Under
this arrangement, families struggling to pay their mortgage could sell part of
the equity in their home and rent it back from a housing association or private
firm.
"These plans could be funded using money already committed to social
housing but currently unspent because of the collapse of new building. They
would also save taxpayers the cost of re-housing the homeless without going down
the disastrous route of giving open-ended guarantees for new mortgage
lending."
ENDS
Notes to Editors
The Liberal Democrats are due to debate these proposals at their forthcoming
autumn conference. The full text of the conference motion is copied below:
Conference notes that:
i) House prices have continually fallen since last autumn, with further falls
predicted, putting millions of people into negative equity.
ii) 1 million households spend more than two-thirds of their income on housing
according to a recent survey by Shelter.
iii) The number of repossessions and repossession claims have more than doubled
in the last five years, reaching a 15-year high in 2007.
iv) Under this Government the social housing safety net has dwindled from 4.386
million social homes to rent in England in 1997 to just 3.936 million social
homes in 2006 while the number of households on social housing waiting lists has
risen almost 70% to 1.67 million and notes that the Local Government Association
predicts that this could rise to 2 million households by 2010.
Conference supports the policies passed in conference motion Homes for All in
spring 2008 to increase the supply of sustainable social and affordable housing.
Conference acknowledges:
a) The current dramatic falls in house prices are the result of an
unsustainable bubble that formed in the housing market fuelled by irresponsible
lending.
b) Throughout the period of unsustainable growth in the housing market the
Government made no attempt to deal with the housing bubble, or to crack down on
irresponsible levels of lending.
c) That while it is not the job of government to prevent house prices falling
to a more affordable level, it is not in the interest of the economy as a whole
if negative equity and repossession leads to large numbers of people becoming
homeless and over-indebted.
Conference therefore calls on the Government to:
1. Allow councils and Registered Social Landlords to borrow against their
assets to buy up unsold properties and sites from building companies in order to
replenish the social housing stock, to deal with the current 1.67 million
households on social housing waiting lists.
2. Introduce a statutory Code of Practice for mortgage lenders to ensure that
repossession is the only ever the last resort - all borrowers in arrears should
be offered:
a) Free independent financial advice.
b) A chance to renegotiate the terms of their mortgage.
c) An opportunity to sell equity in their home to a Registered Social Landlord
(RSL) and become part-tenants of that landlord, dependent on meeting the
requirements of the RSL.
3. Protect vulnerable homeowners against rogue doorstep companies by regulating
the private 'sale and leaseback' market as a financial service through
the Financial Services Agency.
-----Original Message-----
From: xxx
Sent: 28 August 2008 09:48
To: Liberal Democrat Policy Enquiries
Subject: Website feedback
Category: Policy
Title:
First Name: xxx
Last Name: xxx
Email Address: xxx
Address 1:
Address 2:
City: null
County: null
Postcode:
Country: GB
Telephone:
Membership Number:
Comments:
Please visit
http://www.housepricecrash.co.uk/newsblog/2008/08/blog-shut-up-cable-16533.php
and realise that I am not the only one who, in the last few hours, has decided
not to vote for lib dems. What I don't understand, and what I find deeply
depressing, is that Mr Cable is usually the lone voice of common sense and
decency. Now we have no-one.