Jump to content
House Price Crash Forum
spyguy

Fca - New Mortgage News - (Merged Topics)

Recommended Posts

Making tea.

Absolute 80s on.

There's a new FCA advert - Can you afford your mortgage????? There's new lending rules coming in end of this month. Don't forget about council tax etc etc etc.

Makes a change after listening to countless 'Your money is safe with the FCA looking on'.

http://www.fca.org.uk/consumers/financial-services-products/mortgages/mortgage-market-review

'In the past, some people were allowed to take out a mortgage they could not afford. This led to some of them falling behind with their payments or losing their home.'

You don't say . . .

Here's the rules:

http://www.fca.org.uk/consumers/financial-services-products/mortgages/mortgage-market-review/affording-a-mortgage

Christ. Nevermind whether you can afford the mortgage or not, just filling in the form will kill the market.

I call Pop! end of this week, 26th April, when these rules come in.

Edited by spyguy

Share this post


Link to post
Share on other sites

Maybe the next bubble will be in firms fillling out forms for a fee.

That's a description of the IFA circa 1998-2012 - knowing which lies to tell to which mortgage firms.

Share this post


Link to post
Share on other sites

Making tea.

Absolute 80s on.

There's a new FCA advert - Can you afford your mortgage????? There's new lending rules coming in end of this month. Don't forget about council tax etc etc etc.

Makes a change after listening to countless 'Your money is safe with the FCA looking on'.

http://www.fca.org.uk/consumers/financial-services-products/mortgages/mortgage-market-review

'In the past, some people were allowed to take out a mortgage they could not afford. This led to some of them falling behind with their payments or losing their home.'

You don't say . . .

Here's the rules:

http://www.fca.org.uk/consumers/financial-services-products/mortgages/mortgage-market-review/affording-a-mortgage

Christ. Nevermind whether you can afford the mortgage or not, just filling in the form will kill the market.

I call Pop! end of this week, 26th April, when these rules come in.

I think most people applying for a mortgage now will have been told about these new rules, even if they're not being applied yet. I was pondering this morning whether the current madness is because, once the rules come in, they won't be able to afford anything. If this is the case, then the 'pop' moment will be either at the end of April, or if banks are permitted to support an 'old rules' 6-week mortgage-in-principle, the beginning of June.

Share this post


Link to post
Share on other sites

Any ideas if this will make a difference, as its now quite clear to removing "funding for lending" made bugger all difference.

We're going to need a major shock and some time to get the recent high asking and selling prices down.

Share this post


Link to post
Share on other sites

Landlord's perspective: http://www.property118.com/will-mortgage-market-review-money-spinner-landlords/65134/

They are hoping or even expecting that the goal posts will be moved or rules relaxed by the lenders.

Nice one, the OP has telephone number debt and admits the only game in town is price rtises.

BTLers talking about moving into rented to take advantage of poor yields on larger homes... priceless.

Yields are crap because there's an ever increasing supply of 'accidental' LLs who are renting out rather than selling when they move, or are new entrant BTLers on the road to riches. Hopefully plenty more supply to come too, a bit more pressure on rents would be very welcome.

Share this post


Link to post
Share on other sites

Nice one, the OP has telephone number debt and admits the only game in town is price rtises.

BTLers talking about moving into rented to take advantage of poor yields on larger homes... priceless.

Yields are crap because there's an ever increasing supply of 'accidental' LLs who are renting out rather than selling when they move, or are new entrant BTLers on the road to riches. Hopefully plenty more supply to come too, a bit more pressure on rents would be very welcome.

The LL poster has a lot of tenchincal sounding detail but its all nuts.

A selection:

'in fact some lenders are even placing a “what if” interest rate rise scenario in their calculations with a testing 7% to cover rate rises that they expect over the next five years. This is despite most analysts predicting over that time period a more likely rate of 3% as a worst case scenario'

Confusing BoE base rates with the rate at which banks can borrow and the spread theyll lend out at.

'You will be amused at how little you will be able to borrow. I was and if like me you thought the online calculator was just a rough guide you will be shocked to learn that it is a lot more accurate than you thought.'

Prats got so much debt he's suprised the banks will not lend to him.

'I promptly telephoned my mortgage lender on the basis that my partner and I were intending to move away from the area to purchase a larger and more expensive property. I’m fortunate enough to be in receipt of a guaranteed income in the form of a good pension'

Why would a bank want to advance a mortgage to someone on a pension?

;Between us we also receive a good income from our rental properties.;

Yes but what about the mortgage cost?

'This was followed by a long list of further questions that all lenders now have to trawl through and the end result was, “I’m sorry but we cannot lend you anything.” At this point I will just point out that we already have a modest mortgage with the lender, well below the old income multiplier they would have lent us a week ago, but what we would like to borrow is still less than they had previously offered to lend us.'

How much does this bloke owe FFS??

'He was aware of our BTL commitments, which were not a concern, contrary to previous enquiries at the time of obtaining our current residential mortgage, but our only other outgoings are day to day living expenses, a small residential mortgage and two life insurance policy payments. Neither of us has any adverse credit history and we have no other debts, loans or credit and everything we own is paid for.'

Paid for? Aprt from a number of BTLs and a residental mortgage!!!

'We have a six figure sum invested in a managed fund, a further six figure sum that we could access instantly and a seven figure sum representing property assets (below the 3 million required to opt out of MMR criteria).'

It does not matter if you have 2 6 figure sums if you owe 7 figures on mortgages.

'Unfortunately, what we receive as income every month was outweighed on paper by the losses we are carrying over to the following years’ tax assessment.'

What paper loss? Are the BTL generating cash or losing it?

'So other than the very rich, who will fly below the MMR radar and those that wish to risk tying up a pile of their own cash, the majority of house purchasers and remortgagers are going to be very restricted by the mortgage market.'

Tying up cash??? He's got a lot of debt tied up.

Share this post


Link to post
Share on other sites

The LL poster has a lot of tenchincal sounding detail but its all nuts.

A selection:

'You will be amused at how little you will be able to borrow. I was and if like me you thought the online calculator was just a rough guide you will be shocked to learn that it is a lot more accurate than you thought.'

Well Im amused at how much landlords think a property is worth. Delusion, meet reality. He's moving in at the end of the month and looks set to stay for some time.

Share this post


Link to post
Share on other sites

A selection:

'So other than the very rich, who will fly below the MMR radar and those that wish to risk tying up a pile of their own cash, the majority of house purchasers and remortgagers are going to be very restricted by the mortgage market.'

Purchasers are going to be restricted by the mortgage market. Or….. house prices are going to fall in line with what can be borrowed responsibly, perchance?

Share this post


Link to post
Share on other sites

And the Mail:

http://www.dailymail.co.uk/news/article-2609859/The-mortgage-inquisition-Borrowers-face-tough-new-quiz-home-loan-spell-end-cheap-fixed-rates-warns-watchdog.html

Comments would indicate that the banks are alread applying the guidelines.

People hoping for the 6 weeks mortgage in principle, or watering down seem to be very wrong.

It would tie up with where I currently am (not London). Despite the noise in the paper, there does not seem to be any transactions.

occuring.

Share this post


Link to post
Share on other sites

Making tea.

Absolute 80s on.

There's a new FCA advert - Can you afford your mortgage????? There's new lending rules coming in end of this month. Don't forget about council tax etc etc etc.

Makes a change after listening to countless 'Your money is safe with the FCA looking on'.

http://www.fca.org.uk/consumers/financial-services-products/mortgages/mortgage-market-review

'In the past, some people were allowed to take out a mortgage they could not afford. This led to some of them falling behind with their payments or losing their home.'

You don't say . . .

Here's the rules:

http://www.fca.org.uk/consumers/financial-services-products/mortgages/mortgage-market-review/affording-a-mortgage

Christ. Nevermind whether you can afford the mortgage or not, just filling in the form will kill the market.

I call Pop! end of this week, 26th April, when these rules come in.

I predict a Bank No-Selling scandal.

Share this post


Link to post
Share on other sites

Any ideas if this will make a difference, as its now quite clear to removing "funding for lending" made bugger all difference.

In the quarter before the end of FFL, lenders took out four times more than they did the previous quarter. In a hat-tip to Democorruptcy, under the FFL rules, banks were allowed to borrow £10 of FFL money this year for every £1 they lent last year. In short, the FFL scheme for mortgages has now closed but banks have amassed enough of a war chest from it to last until at least another year (May 2015 perhaps?). That's why savings rates, astonishingly, are continuing to fall.

Share this post


Link to post
Share on other sites

Landlord's perspective: http://www.property118.com/will-mortgage-market-review-money-spinner-landlords/65134/

They are hoping or even expecting that the goal posts will be moved or rules relaxed by the lenders.

These are the relaxed rules. These new restrictions were the response to the 08 financial meltdown. It has taken this long for them to be agreed, watered down and can-kicked.

Share this post


Link to post
Share on other sites

People hoping for the 6 weeks mortgage in principle, or watering down seem to be very wrong.

I understand that lenders could, ahem, half fill out large numbers of forms in advance of the deadline, complete them after and thus get people round these new restrictions for a while.

Share this post


Link to post
Share on other sites

I understand that lenders could, ahem, half fill out large numbers of forms in advance of the deadline, complete them after and thus get people round these new restrictions for a while.

sensible fraud.

Share this post


Link to post
Share on other sites

These are the relaxed rules. These new restrictions were the response to the 08 financial meltdown. It has taken this long for them to be agreed, watered down and can-kicked.

Watered down looks about right, surely having the sum related to salary multiples needs to be in, even if it was 10 times salary so it can be amended after the next crash.

Share this post


Link to post
Share on other sites

When is a deadline not a dead line? FCA to allow brokers & lenders bedding in time before they start compliance checks. Notice there is no limit given for this extra compliance time.

http://www.mortgagesolutions.co.uk/mortgage-solutions/news/2340800/fca-to-allow-industry-period-of-mmr-adjustment-before-compliance-checks

FCA says MMR will not cause lending to drop off - well really why would it if no checks are being done? Same old same old.

http://www.mortgagestrategy.co.uk/news-and-features/sectors/regulation/regulation-news/fca-mmr-will-not-cause-lending-to-drop-off/2009388.article

But it's all okay coz the FCA will be keeping an eye out for 'mortgage gamers' as they know now what to look for. This article mentions BTL a lot. (read as advertising intructions for brokers)

http://www.mortgagesolutions.co.uk/mortgage-solutions/news/2340794/fca-we-will-be-watching-for-all-types-of-gamers-post-mmr

:wacko:

Share this post


Link to post
Share on other sites

I predict a Bank No-Selling scandal.

I predict very little change. If the affordability doesn't fit you just extend the term until it does. 25 years to 40 years makes a whole pile of difference to the monthly payment. The lenders recomend this, levels of business are upheld and they get even more of that lovely interest stuff from the customer. Win win

The lenders are bound to claim hardship, it's their default position and a good reason to relax BTL criteria further. And when their lending figures are strong it will be accredited to their hard work and new systems.

Edited by neontetra

Share this post


Link to post
Share on other sites

When is a deadline not a dead line? FCA to allow brokers & lenders bedding in time before they start compliance checks. Notice there is no limit given for this extra compliance time.

http://www.mortgagesolutions.co.uk/mortgage-solutions/news/2340800/fca-to-allow-industry-period-of-mmr-adjustment-before-compliance-checks

FCA says MMR will not cause lending to drop off - well really why would it if no checks are being done? Same old same old.

http://www.mortgagestrategy.co.uk/news-and-features/sectors/regulation/regulation-news/fca-mmr-will-not-cause-lending-to-drop-off/2009388.article

But it's all okay coz the FCA will be keeping an eye out for 'mortgage gamers' as they know now what to look for. This article mentions BTL a lot. (read as advertising intructions for brokers)

http://www.mortgagesolutions.co.uk/mortgage-solutions/news/2340794/fca-we-will-be-watching-for-all-types-of-gamers-post-mmr

:wacko:

they are talking about the advice human advisers give post deadline. the SYSTEM will, however, be in place with its tickbox questions, so effective in saving many small children from harm.

Share this post


Link to post
Share on other sites

I predict very little change. If the affordability doesn't fit you just extend the term until it does. 25 years to 40 years makes a whole pile of difference to the monthly payment. The lenders recomend this, levels of business are upheld and they get even more of that lovely interest stuff from the customer. Win win

Term extension is backdoor IO.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   203 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.