interestrateripoff Posted May 8, 2013 Share Posted May 8, 2013 http://uk.reuters.com/article/2013/05/08/uk-britain-boe-politics-idUKBRE9470L420130508 Two former Bank of England policymakers criticised on Wednesday a flagship government scheme to boost mortgages, saying it would encourage more risky lending in an economy already overburdened with debt.Former deputy governor Rachel Lomax described the Help-to-Buy initiative as a "short-term political fix" and a "hair of the dog" approach - a reference to treating a hangover with more alcohol. Chancellor George Osborne announced the scheme in March as a way of helping people on to the property ladder at a time when banks are demanding big down payments. It allows some buyers to get a mortgage with a deposit of just 5 percent via up to 130 billion pounds of government guarantees on high-risk mortgages for three years. But it has attracted criticism that it will encourage a return to the risky lending that caused the housing market to overheat in the run-up to the global financial crisis of 2008. Of course it's a short term political fix, it's what politicians do. They just want to avoid the SHTF on their watch. It's a game of pass the turd. Quote Link to comment Share on other sites More sharing options...
Tired of Waiting Posted May 8, 2013 Share Posted May 8, 2013 http://uk.reuters.com/article/2013/05/08/uk-britain-boe-politics-idUKBRE9470L420130508 Of course it's a short term political fix, it's what politicians do. They just want to avoid the SHTF on their watch. It's a game of pass the turd. " 'hair of the dog' approach" Perfect description. Quote Link to comment Share on other sites More sharing options...
AvoidDebt Posted May 9, 2013 Share Posted May 9, 2013 It's actually criminal. In most other professions wouldn't this be classed as negligence. Imagine a doctor who kept deliberately prescribing harmful drugs to a private patient because he wanted them to keep returning and charging them consulting fees. Quote Link to comment Share on other sites More sharing options...
Tired of Waiting Posted May 9, 2013 Share Posted May 9, 2013 It's actually criminal. In most other professions wouldn't this be classed as negligence. Imagine a doctor who kept deliberately prescribing harmful drugs to a private patient because he wanted them to keep returning and charging them consulting fees. Yep. The root problem is that most voters want the "doctor" to keep their houses "wealth" high. Since these voters can fire the doctor, the doctor obeys. And the regulators don't block it. Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted May 9, 2013 Author Share Posted May 9, 2013 It's actually criminal. In most other professions wouldn't this be classed as negligence. Imagine a doctor who kept deliberately prescribing harmful drugs to a private patient because he wanted them to keep returning and charging them consulting fees. Bankers are special as they are wealth creators and not shirkers. Quote Link to comment Share on other sites More sharing options...
Tired of Waiting Posted May 9, 2013 Share Posted May 9, 2013 (edited) Bankers are special as they are wealth creators and not shirkers. The article is against a "flagship government scheme to boost mortgages" . Edited May 9, 2013 by Tired of Waiting Quote Link to comment Share on other sites More sharing options...
ingermany Posted May 9, 2013 Share Posted May 9, 2013 Help Buy will be the next really big mis-selling scandal. Borrowers will seek compensation for being given massive loans that are commercially non viable (without government subsidy). They will justifiably argue that they should never have been encouraged to take on debts that were clearly unaffordable based on the calculations of the major high street banks. They will also justifiably argue that they weren't appraised of the risks, having been told repeatedly that they can't lose and it's a great time to buy. Add to the mix the fact that the scheme is Treasury funded so the average consumer would reasonably argue that they were led to believe it was a government guaranteed investment. There will be a £130 billion compensation bill plus legal costs. Quote Link to comment Share on other sites More sharing options...
dances with sheeple Posted May 9, 2013 Share Posted May 9, 2013 When does it start? Any indications yet of the likely take up numbers? Quote Link to comment Share on other sites More sharing options...
fluffy666 Posted May 9, 2013 Share Posted May 9, 2013 Yep. The root problem is that most voters want the "doctor" to keep their houses "wealth" high. Since these voters can fire the doctor, the doctor obeys. And the regulators don't block it. I wonder how much the voters actually care.. Quote Link to comment Share on other sites More sharing options...
This Username Is Taken Posted May 9, 2013 Share Posted May 9, 2013 When does it start? Any indications yet of the likely take up numbers? I wrote to my local (Conservative) MP to express my incredulity at Help-to-Buy and this sentence is quoted from his reply: "This will provide £3.5 billion of investment in England to help support up to 74,000 home buyers, as well as boosting the UK's construction sector." Quote Link to comment Share on other sites More sharing options...
goldbug9999 Posted May 9, 2013 Share Posted May 9, 2013 I wrote to my local (Conservative) MP to express my incredulity at Help-to-Buy and this sentence is quoted from his reply: "This will provide £3.5 billion of investment in England to help support up to 74,000 home buyers, as well as boosting the UK's construction sector." Its just bizzare that as a potential low LTV borrower I have to compete against subsidised high LTV buyers. Quote Link to comment Share on other sites More sharing options...
zugzwang Posted May 9, 2013 Share Posted May 9, 2013 I wonder how much the voters actually care.. 'Help To Buy Votes' is what it should be called. Quote Link to comment Share on other sites More sharing options...
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