Bank Plans To Cap Risky Mortgages

[The Masked Tulip]

You will love this!

Mortgage lending would be “capped” to stop borrowers taking out risky loans under radical Bank of England plans to prevent a repeat of the credit crisis, a senior official has disclosed

http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/7971097/Bank-plans-to-cap-risky-mortgages.html

[thecrashingisles]

Mortgage lending would be “capped” to stop borrowers taking out risky loans under radical Bank of England plans to prevent a repeat of the credit crisis, a senior official has disclosed

Knees would be “capped” to prevent Bank of England officials putting limits on risky loans under radical plans to kick start the housing market, a senior banker has disclosed

[interestrateripoff]

Excellent the horse has already bolted and the idiots decide to shut the stable door.

[Redcellar]

Mortgage lending would be “capped”

It's just talking about LTV though, which seems pretty weak. FSA had it right when they said this is daft and it needs to be about people being able to pay back the loan.

Can't see it making any difference at all, especially if the proposal is 90%.

[JonD]

Its BtL mortgages that need to be capped otherwise its far too easy for landlords to buy houses that first time buyers can't while they save up a deposit.

[porca misèria]

Can't see it making any difference at all, especially if the proposal is 90%.

Smells of target ... now we can have a meeja campaign against any bank that sets a different figure, or charges different rates according to LTV.

[Frank Hovis]

It would at least stop the 105% mortgage ever being offered again. That was a good idea wasn't it Northern Rock?

[dances with sheeple]

Mortgage lending already is capped, they are just trying to force some sales to get a bit of downward momentum going, we can`t have a frozen housing market?

[buzzardo]

David Hollingworth, of London & Country Mortgages, a broker, said: “The mortgage market is still very slow and the biggest hurdle at the moment is boosting the availability of home loans, not restricting them. Very few first-time buyers can afford a big deposit so its important that they are not excluded.

There are some complete c*cks in the world right now, that I would dearly love to see hanging from the nearest lamppost sometime in the next few months.

"Bulging Sac" Boulger, and now Mr Hollingworth, are high on my virtual list.

When will someone spot that the answer to all this is to ALLOW THE HOUSING MARKET TO CORRECT?

Sure, some economically illiterate ar$eholes who've bought in the last two years, or in the last 5-7 years, and then MEW-ed to death for that "must have" holiday / car / designer tat / etc etc, will get burnt - but that's a price that is bluntly worth paying to get this nation back on its feet.

Maybe a few more million people will also then have to get useful jobs. You know, those traditional ones that actually add some value, rather than sucking at the rapidly-diminishing productive teat of the UK economy.

At least that means we'd have many fewer scumbag EA's, fouling every street in the nation. And fewer Mortgage Brokers, Bankers, IFAs, and the rest; the list is pretty long, and I can't be arsed to finish it at this time of night - but feel free to add your own thoughts, fellow HPC-ers...

:angry:

B

[Fairies Wear Boots]

Ha. And number three on the telegraphs list is about how eight out of ten FTBers get their deposit from the Bank of Mum and Dad. How sustainable is that ? The people snapping up bargains with Mummy and Daddies money can only last for so long.

[porca misèria]

It would at least stop the 105% mortgage ever being offered again. That was a good idea wasn't it Northern Rock?

You think so?

If someone wants to offer 105% they'll work around any rules that say no. For example, jack up the nominal price, lend 90% of it, and give a cash discount. Or give a top-up-loan outside the mortgage.

[Mega]

Gents........relax

They print, inflation will take off UK will start to sink & they print more..........£ will drop like a stone....rates will climb...BTLers will be "Taken out"......we ben back to the 90's.....if your a pennyless ass then you Don't get a house!..............

Mike

[LiveAndLetBuy]

The FSA don't like it. The "mortgage experts" don't like it, Hmmm, I'm beginning to like it already.

[LiveAndLetBuy]

Mortgage lending would be “capped”

It's just talking about LTV though, which seems pretty weak. FSA had it right when they said this is daft and it needs to be about people being able to pay back the loan.

Can't see it making any difference at all, especially if the proposal is 90%.

I think a pretty good test for whether someone is able to pay back the loan is whether they are able to save up 10% of the value in the first place. Besides most of the tests the FSA have supported have been somewhat prone to "over optimism".

[jammo]

You think so?

If someone wants to offer 105% they'll work around any rules that say no. For example, jack up the nominal price, lend 90% of it, and give a cash discount. Or give a top-up-loan outside the mortgage.

'Cos adding 15% to a price is really going to attract buyers when the market is totally dead

And having 2 mortgages (including that very special 5% more debt than the house is worth before it falls in value nominally as well) is really going to appeal to both buyer and creditor too

[eric pebble]

Knees would be “capped” to prevent Bank of England officials putting limits on risky loans under radical plans to kick start the housing market, a senior banker has disclosed

[Bloo Loo]

Its a good idea...Investors inbanks need to be protected from commission hungry employees.

course, lending criteria based on salary would be a good start.

and no tax relief whatsoever on ANY Mortgage used to purchase a building marked for housing.

[Realistbear]

You will love this!

http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/7971097/Bank-plans-to-cap-risky-mortgages.html

Any loan is at risk in this market. What are these fools on about? Do they want HPI to continue or not? KIill the disease, let the market finds its natural level and THEN put in place preventative measures to limit a bubble ever forming again. They need to either take a dump or get off the karzi as the dithering is taking us on a road to destruction.

[Lepista]

Mortgage lending would be “capped” to stop borrowers taking out risky loans under radical Bank of England plans to prevent a repeat of the credit crisis, a senior official has disclosed

so let me get this straight - they recognise that they have been (and still are) giving out risky loans?

Alfred wept.

[gf3]

Until the early 1980s, banks were only allowed to lend money that had been deposited by savers, therefore mortgages were effectively rationed. However, these rules were scrapped by Margaret Thatcher’s administration, which allowed banks to raise money for lending from the money markets.

This looks like a good thing to reintroduce.

[porca misèria]

'Cos adding 15% to a price is really going to attract buyers when the market is totally dead

Noone supposes bubble-lending is coming back in the near future. It'll need the current bust to have faded in the memory, plus another economically-illiterate government to mistake bubble-money for healthy growth.

[Pent Up]

Wasn't this in the June budget? BOE given new powers to cap mortgages if they deem necessary.

So does this mean they actually going to do it? Or are they just echoing what we already know?

[Dames]

Of course what they won't do is cap the income multiple , this imho would have a much better effect in bring prices down , which is of course why they won't do it for all the reasons discussed on this site.

D

[nixy]

Excellent the horse has already bolted and the idiots decide to shut the stable door.

So what they are saying is they were not bright enough to realise there was risk.

or, as I suspect is the truth, they were (are bright) , they knew there was risk, but they was an opportunity to cream some more off the top.

What's that phrase, were the risk they take, isn't the same if they had to bear the consequences?? ......... poxing memory.

[nixy]

So what they are saying is they were not bright enough to realise there was risk.

or, as I suspect is the truth, they were (are bright) , they knew there was risk, but they was an opportunity to cream some more off the top.

What's that phrase, were the risk they take, isn't the same if they had to bear the consequences?? ......... poxy memory.

got it .......... moral hazard.

where you ( a banker) can take any risk you like, knowing the mug tax payer will pick up the bill.

http://en.wikipedia.org/wiki/Moral_hazard

'Moral hazard occurs when a party insulated from risk behaves differently than it would behave if it were fully exposed to the risk.'

edit -- the usual

Edited August 30, 2010 by nixy