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Killer Bunny

What Mortgage Brokers Think

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Article in trade press about a new whizzy mortgage product for BTLErs which make even easier to borrow (because loans are normally based on rentals):

"This product will enable landlords in London to borrow closer to the max LTV, which is important in the capital where house prices are high and rents don't correspond'"

HAHAHAHAHAHAHAHA :lol::lol::lol::lol::lol::lol::lol:

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"This product will enable landlords in London to borrow closer to the max LTV, which is important in the capital where house prices are high and rents don't correspond'"

I think their language parser needs to some work if it's going to pass the Turing test. Is there any way to read that so that it makes sense?

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I think their language parser needs to some work if it's going to pass the Turing test. Is there any way to read that so that it makes sense?

Er... the relevant bit: "house prices are high and rents don't correspond". The illogicality is striking, as well as the BS.

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That is funny.

When this all goes tits up I wonder how much the Pound will get trashed. The UK is like 'Invasion of the Body Snatchers' - the aliens take you over and make you believe higher and highers house prices are needed.

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How does this even work? You have to pass an affordability check based on your personal income and you are expected to make up the shortfall between rent and mortgage interest each month?

It seems crazy, if you want to BTL then why not just buy in a place where yields are higher, and then invest in property derivatives or whatever if you really want to speculate.

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Rents not stacking up to existing lending criteria? Not a problem we'll just change the criteria then (Santander have just eased their BTL criteria substantially). MMR is less than a month away, gotta keep the gravy train rolling and unregulated loans are so much easier for the banks.

If you know beforehand that your investment isn't going to make you any money why would you do it? So deeply entrenched is the house prices only rise mentality that people will actually do this.

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It's not only housing malinvestment that people see propped up via irresponsible lending, it's also businesses that should rightfully have gone under years ago that are able to stick two fingers up at logic. People see this going on all around them, not only in housing - little wonder that they feel locked into a if you can't beat them join them mentality. Housing is but one element of the debt fuelled spree that has gripped this country in totality.

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It's called negative gearing - apparently they have this in Australia, htey also had it in Ireland prior to the 'big bust' (.)(.)

If the landlord is losing money every month then it can't be too bad deal for renters. :)

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Rents not stacking up to existing lending criteria? Not a problem we'll just change the criteria then (Santander have just eased their BTL criteria substantially). MMR is less than a month away, gotta keep the gravy train rolling and unregulated loans LIAR LOANS are so much 'easier' for the banks.

If you know beforehand that your investment isn't going to make you any money why would you do it? So deeply entrenched is the house prices only rise mentality that people will actually do this.

Corrected.

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Corrected.

This is so funny. It is totally to the heart of the matter. If money is created as a loan against a guarantee to repay said loan in the future, then the whole system is predicated on trust.

When the loans are made and there is no will or ability (lies) to repay the loan then facing up to that runs the risk of crippling the system (Greece).

If you look at the Mega picture, the USA has been exporting debt to China and the rest of the world on trust that it will be repaid.

Once the trust has run out, the whole thing will shift to running on naked power.

We are in the transitional state I think.

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It's not only housing malinvestment that people see propped up via irresponsible lending, it's also businesses that should rightfully have gone under years ago that are able to stick two fingers up at logic. People see this going on all around them, not only in housing - little wonder that they feel locked into a if you can't beat them join them mentality. Housing is but one element of the debt fuelled spree that has gripped this country in totality.

+1

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If you know beforehand that your investment isn't going to make you any money why would you do it? So deeply entrenched is the house prices only rise mentality that people will actually do this.

The weird thing is that our political storytelling would have us believe that we have monetary policy which is informed by the terrible dangers of embedding inflationary expectations (in CPI) as those inflationary expectations in current prices will, the story goes, lead to wage inflation, which apparently leads to the end of the world. Storytelling aside, actual monetary policy, in terms of how are banks are structured and how we actually grow the money supply, depends entirely on embedding expectations regarding house price inflation. At least that it how it looks to me...

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The weird thing is that our political storytelling would have us believe that we have monetary policy which is informed by the terrible dangers of embedding inflationary expectations (in CPI) as those inflationary expectations in current prices will, the story goes, lead to wage inflation, which apparently leads to the end of the world. Storytelling aside, actual monetary policy, in terms of how are banks are structured and how we actually grow the money supply, depends entirely on embedding expectations regarding house price inflation. At least that it how it looks to me...

I think you are right. If you look at BTL for example, the bankers didn't just wake up one day in a collective good mood coz the sun was shining and birds were singing and decide to introduce a new type of mortgage that would help regular folk get rich or richer. It must have fitted into their grand scheme of generating new money supply with some additional incentives and bonuses for them selves. All they had to do was sell it to us. A combination of our need for security and lust for financial gain made us susceptible and willing targets - lemon drops. I don't have the economic lingo or understanding that you and others on this board have but I do know that the whole housing market is rigged and that manipulating house prices up and up must be a fundamental requirement that makes whatever their system or scheme is, work. Every body who is not independently wealthy loses, buyers, renters, even the BTL LL's. Yet we have all bought into the game in one way or another because we need housing. We have little choice but to play the game engineered by the bankers for their own benefit. What else can we do?

Actually scrap that. I might just go exploring, get some sun and perhaps by the time I get back they will have pushed housing costs so high that the whole system has imploded and splattered mucky debt all over them. Because, with the exception of Cliff Richard, nothing goes on forever.

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