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Tough New Mortgage Rules On Affordability

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...the backpassage and filtered downstream.

Course it did. Long live Ponzy!

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Tough new mortgage rules relaxed

http://www.independent.co.uk/money/mortgages/tough-new-mortgage-rules-relaxed-2249688.html

The City watchdog showed signs today of easing the tough affordability criteria lenders must use as part of its overhaul of the mortgage market.

The Financial Services Authority (FSA) was intending to force lenders to assess whether borrowers could afford a mortgage based on a 25-year repayment loan, even if the mortgage was being taken out over a longer period or on an interest-only basis.

But the regulator appeared to backtrack today, when it acknowledged that its proposal "may not be appropriate, given the range of different individual circumstances".

It said: "We recognise the need not to take a 'one size fits all' approach and the need to balance the advantages of simplicity against those of flexibility."

The FSA added that it did not plan to ban interest-only mortgages, as had been feared at one stage, although lenders are still likely to have to take into account whether borrowers have a credible repayment plan in place when assessing affordability.

As part of the Mortgage Market Review, the regulator is putting a far greater emphasis on lenders to ensure that borrowers can afford their repayments, particularly if interest rates rise.

In its business plan for the coming year, which was published today, the FSA said a "tail of poor lending" had led to consumers taking on mortgages that were either unaffordable at the time or were at a significant risk of becoming unaffordable in the future.

It added that a report by the Bank of England found that 18% of borrowers constantly struggled to pay their bills or had missed repayments.

But the Council of Mortgage Lenders warned last year that around 45% of people taking out a mortgage during the past 12 months would have been hit by the new measures if they had already been in force.

The FSA sought to ease these concerns today, saying that in introducing the new rules, it did not want to "unreasonably restrain the access credit-worthy borrowers had to mortgage finance".

It said: "We will seek the right balance between protection for consumers, sustainability of the market and consumer choice."

The regulator plans to publish a cost analysis of the new rules in the summer before setting out its final package of changes early next year.

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There are two ways of handling this

1. Let the lenders do what they like - if they go bust, they go bust

2. Back stop the lenders - in which case, the rules should be eye wateringly tight

This being the UK, we get the worse of both worlds with casino capitalism backed by the tax payer.

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There are two ways of handling this

1. Let the lenders do what they like - if they go bust, they go bust

2. Back stop the lenders - in which case, the rules should be eye wateringly tight

This being the UK, we get the worse of both worlds with casino capitalism backed by the tax payer.

i.e:

PREDATORY LIAR LOANS

The MASSIVE Weapon of Mass Destruction of Western Economies....

Sowing toxic debt poison into the soil.... :angry: :angry:

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In the current circumstances it is impossible for the lenders to pass on this debt to other instutations such as pension companies. Therefore the debt remains with them. The way it used to be. Therefore they will, and have been for the last 3 years, more careful about how much and who they are lending to. If anyone has been for a mortgage recently, they will understand. During the boom you could almost obtain a 110% LTV @ 8 times pretend income over the phone. Alot of this is bolting the door after the horse has bolted, matured and sadly passed away.

I would say most of this is being practised by the banks anyway. Begs the question why block it. The only reason I can find is there are good borrowers being refused mortgages at the moment for minute things. If the banks have to tighten this even further the system will stop altogether.

Edited by BelfastVI

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What a ******ing joke! Looks like the UK economy is being sacrificed in favour of keeping the market up and paying banker profits.

I ******ing hate this country.

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This politically driven, vote inducing rhetoric will rear its head once again when the coalition government falls.

I don't see that being very far away, seeing has Camoron has send Britain in to bomb yet another country for oil, with no chance of a positive political outcome.

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In the current circumstances it is impossible for the lenders to pass on this debt to other instutations such as pension companies. Therefore the debt remains with them. The way it used to be. Therefore they will, and have been for the last 3 years, more careful about how much and who they are lending to.

No, there is now an implicit government guarantee that banks that ****** up will be bailed out. Until the government declares "No more bailouts" and passes a law accordingly, or even better splits retail banking and investment banking (FFS it worked after the 1929 crash until they repealed the laws!) then banks will assume they will get bailed out if their risk-taking goes wrong. In fact, it is worse now than before 2008 - prior to then banks weren't sure they'd be bailed out, now they know for sure that they will.

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No, there is now an implicit government guarantee that banks that ****** up will be bailed out. Until the government declares "No more bailouts" and passes a law accordingly, or even better splits retail banking and investment banking (FFS it worked after the 1929 crash until they repealed the laws!) then banks will assume they will get bailed out if their risk-taking goes wrong. In fact, it is worse now than before 2008 - prior to then banks weren't sure they'd be bailed out, now they know for sure that they will.

I'm not sure they will be from this point on. The next collapse will see a wholesale sell-off of the nation's resources, or perhaps we are all heading into one big and messy, global war against idealism. There is nothing worth left taking from the majority of Britain's citizenry, as most of us are heavily in debt and getting poorer by the day.

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i.e:

PREDATORY LIAR LOANS

The MASSIVE Weapon of Mass Destruction of Western Economies....

Sowing toxic debt poison into the soil.... :angry: :angry:

"As part of the Mortgage Market Review (a further poisonous 'injection') the regulator is putting a far greater emphasis on lenders to ensure that borrowers can afford their repayments, particularly if interest rates rise."

Great larf - so backed up (not-to-fail) by the UK taxpayer they don't give a shit what/how they lend and will go straight back to the old ways of the past 15yrs! :rolleyes:

Edited by erranta

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Lord All Mouth And No Trousers strikes again.

Isn't that what the FSA is for?

As posted by ARD-man

"Techno trousers originally developed by NASA are given to Gromit as a birthday present. Wallace thinks they will be perfect for walkies, but little does he know that in the wrong hands they can be used for much more sinister means..." :ph34r:

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There are two ways of handling this

1. Let the lenders do what they like - if they go bust, they go bust

2. Back stop the lenders - in which case, the rules should be eye wateringly tight

This being the UK, we get the worse of both worlds with casino capitalism backed by the tax payer.

I agree. I still feel that using tax payers' money like that is a bit like stealing. :unsure:

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MMR watered down, inflation rampant...

I've given up and decided to buy. I've come to the conclusion that the Coalition and BoE will do anything and everything to prop this market up.

As a result I might as well join the party and get my debts inflated away rather than sit on the sidelines getting angry and watching my deposit shrink.

What a country...

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MMR watered down, inflation rampant...

I've given up and decided to buy. I've come to the conclusion that the Coalition and BoE will do anything and everything to prop this market up.

As a result I might as well join the party and get my debts inflated away rather than sit on the sidelines getting angry and watching my deposit shrink.

What a country...

Only problem with that is there is no house price or wage inflation to inflate away your debts.

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It sounds like the penny is starting to drop at the FSA. Without the widespread availability of IO mortgages there is no chance of house prices being sustainable at current levels. All those downsizers currently failing to offload £1/2 million plus houses onto their unsuspecting juniors will still be de-cluttering etc in 10 years time if the banks carry on like this.

According to the FSA 33% of all loans taken out in 2007 were IO, the vast majority without a repayment vehicle. Even then, when mortgage rates were around 6%, those just renting the money off the bank with no means of actually paying it back, were able to buy 1/3 more property than those with a repayment mortgage. No wonder prices went really mental in the years before when rates were lower and the advantage to IO borrowers was even greater.

In reality there are very few people around whose financial situations really justify borrowing on an IO basis. Why can’t the tiny minority that really warrant such an arrangement get their loans from institutions that lend their own money, not putting the tax-payer at risk?

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I'm not sure they will be from this point on. The next collapse will see a wholesale sell-off of the nation's resources, or perhaps we are all heading into one big and messy, global war against idealism. There is nothing worth left taking from the majority of Britain's citizenry, as most of us are heavily in debt and getting poorer by the day.

52% of UK households have unsecured debt and about (IIRC) 40% of households are mortgage free. About half of UK households therefore have savings that can still be pilfered in some way or another (bank bailouts, inflation, currency devaluation, taxes, etc). There is still plenty left to lose. I just get the feeling banks are getting ready to loosen lending again and the FSA and BoE are voluntarily removing their fangs to allow the reckless lending to recommence.

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If they do loosen again then feck it, I'm going all out on acquiring as much debt as I can to speculate in property and buy to lets, with the aim of making myself too big to fail. Even if I can't make myself TBTF, I'll do a Bovey and extract as much cash as I can from my failing empire, transfer it to my other half and let the taxpayer pick up the tab whilst living the life of Riley.

It's the only way to get ahead in this country, it would seem. There's no point in trying to do the right thing and be sensible any more, and no point looking at the fundamentals either. We've decoupled from reality - warp speed to the new paradigm!

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If they do loosen again then feck it, I'm going all out on acquiring as much debt as I can to speculate in property and buy to lets, with the aim of making myself too big to fail. Even if I can't make myself TBTF, I'll do a Bovey and extract as much cash as I can from my failing empire, transfer it to my other half and let the taxpayer pick up the tab whilst living the life of Riley.

It's the only way to get ahead in this country, it would seem. There's no point in trying to do the right thing and be sensible any more, and no point looking at the fundamentals either. We've decoupled from reality - warp speed to the new paradigm!

Ne'er has a truer word been said. The options are:

1) As you state above, do the 'wrong' thing and become too big to fail. Get bailed out, make a mint.

2) Get out of the country.

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If they do loosen again then feck it, I'm going all out on acquiring as much debt as I can to speculate in property and buy to lets, with the aim of making myself too big to fail. Even if I can't make myself TBTF, I'll do a Bovey and extract as much cash as I can from my failing empire, transfer it to my other half and let the taxpayer pick up the tab whilst living the life of Riley.

It's the only way to get ahead in this country, it would seem. There's no point in trying to do the right thing and be sensible any more, and no point looking at the fundamentals either. We've decoupled from reality - warp speed to the new paradigm!

+1

And why wouldn't you? It is quite literally a win-win situation. I want the banks to start loose lending again. I'm going to make a mint.

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+1

And why wouldn't you? It is quite literally a win-win situation. I want the banks to start loose lending again. I'm going to make a mint.

:rolleyes::rolleyes:

Yup...

It's back to the days of

PREDATORY LIAR LOANS

& a false, hyped up market - where FRAUD rules....

:rolleyes: :angry:

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  • 276 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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