Tuesday, Feb 02, 2010
No need to regulate us, guv
The Guardian: Mortgage market has already cleaned itself up, lenders say
The Council of Mortgage Lenders, the industry's trade body, has urged the FSA to hold fire on plans to clamp down on controversial mortgage practices such asself-certification "liar loans", arguing that the home loans market had "corrected itself" and there would be no return to the excesses of the past.
The CML said many of the problems of the past had already been corrected by mortgage firms following a rise in fraud and losses, while self-cert deals had disappeared in response to public criticism. Borrowers, too, were taking a more responsible approach.
"We believe that an outright ban on some products – or an obligation to verify income in every case, whatever the risk – would have harmful long-term consequences," said the organisation.
13 Comments
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1. fallingbuzzard said...
Leopard changes its spots
2. waitingtobuy said...
"We do believe … that an outright ban on some products – or an obligation to verify income in every case, whatever the risk – would have harmful long-term consequences and can be avoided," said the organisation.
Why???
3. fallingbuzzard said...
Because they won't be able to offer liar loans which is what is needed to keep the housing market propped up and/or rising.
4. icarus said...
The title's last three words were "lenders tell regulator". Isn't it the regulators' job to find out for themselves?
5. jack c said...
Income for mortgage purposes should be 100% in line with that submitted to HMRC end of story - no self cert or fast-track etc.... we then get sensible open and honest transactions between borrowers and lenders. The pyramid then collapses which is why it wont happen and the slightest hint of a tighter criteria has the VI's squealing like stuffed pigs.
6. Buy Toilet said...
"harmful long-term consequences"
Mmmm yes, much more harmful than dealing with the aftermath of a housing boom pumped with liar loans.
7. Crunchy said...
Who's regulating the regulators that are meant to regulate the unregulatable?
It's the equivalent of asking a baby to regulate it's drunken mother.
Who made this dilemma possible? The banks. Who is responsible? Career and short-sighted politicians. Who made it probable? The population, some through (low pension, thanks Brown) necessity others through greed.
Who was the promoter? The media, helped along by the government, banks and greed/need.
Now you know the extent of the problem and why this will not be resolved anytime soon.
Get over it for now! We don't need bank reform, we need an effective revolution to completely flush out the system.
8. str 2007 said...
I currently face a dilema where by the business I started 3 years ago did very well in the first year, quite well in thhe second year and then knowing the recession was coming I simply paid ourselves the minimum of wages and left money in the business.
Due to a combination of illness and worse recession this year the figures are quite low. But because I left money in the business I could pay that to myself now to bring my income up to a similar level to that of my first year.
My point being that I'm quite capable of deciding how much money I want to borrow and what I can afford to pay back. So I personally find it quite frustrating that I face potentially being forced to pay myself money now which I may prefer to leave in a business and buy a house now because this month and next my books would look more favourable than when my poor year comes through on the figures.
OK in this instance I was ill, but it could of also been a £30-40k bad debt for example.
So I think the genuinely self employed who don't generally rely on others or the state get chastized by box ticking bureaucracy.
So personally I liked the fact you could self certify, but to do so realistically you should be running a VAT registered business (ie with a turnover in excess of £60k).
Providing a sensible deposit of say 20% or upto £100k is forth coming the lenders money is quite safe and a self employed person isn't going to put themselves in a postion where by they'd loose there home and equity.
Having said all that Jack, I do understand your point that the more is lent the higher prices go. Allowing joint incomes was the first big mistake, now the wives have to go out to work rather than it being a choice.
9. markj69 str05 said...
Apparently my neice receives payments for attending college. Perhaps if they included this income in the borrowing calcs, it would help HPI, whilst encouraging parents to keep their children in further/higher education, and help to keep unemployment levels for teenagers down!
10. fallingbuzzard said...
No no no, we need to limit it to working tax credit, child tax credit, child benefit, incapacity benefit and Healthy Start vouchers. Oh I forgot income support and unemployment benefit for the second applicant.
11. symo said...
As a solicitor friend of mine once said "If there isn't a problem why not just state it in the contract anyway". So if the CML is confident that everything is hunky dory (sic) then why not have the legislation anyway. Surely they have nothing to hide?
12. alan_540 said...
2.5x income = back to normal lending. We've still got a long way to go before we get there. 2015 is my guess for a return to normal.
13. Crunchy said...
6. str 2007
The Rockefeller Foundation funded The Womens Lib Movement. It doubled national income taxation and expanded loan capacity.
Does that help any.