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Want A Mortgage? Don't Eat Steak! Revealed: Bizarre Questions In New Home Loan Crackdown


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HOLA441
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HOLA442

I think Sour Mash has it right (emphasis mine) MMR is being used as a headline under which to fight for free lending. I wouldn't be in the least bit surprised if the hold ups at certain lenders were merely a tactic to gain attention. Get the people & media on board agreeing that MMR is too much restriction before relaxing the criteria again. The public are being played by the banks.

Interesting. I just ran some calcs on the boe seasonally adjusted mortgage approvals and based on trend (only 2months) forecast mortgage go year on year year negative around August. Not sure where market expectations are for these. Probably early days to lower them. They (lenders) must have modelled the mmr effects on their business. Note a builder issued a fin statement but said I think mmr would not materially affect them.

This is not advice.

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HOLA443
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HOLA444

I think that's why these MMR checks are causing so much shock amongst people, because up until now they'd only had to think about the short term monthly repayment figure, rather than how they would (or wouldn't) cope if the waters got a bit choppy.

When news came through that the initial reforms would be watered down and can-kicked, the prevailing view on this site was that it didn't matter because the crash would be over by then anyway...

:blink:

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HOLA445

Interesting. I just ran some calcs on the boe seasonally adjusted mortgage approvals and based on trend (only 2months) forecast mortgage go year on year year negative around August. Not sure where market expectations are for these. Probably early days to lower them. They (lenders) must have modelled the mmr effects on their business. Note a builder issued a fin statement but said I think mmr would not materially affect them.

This is not advice.

Your understanding of this is way above me... I just say things as I hear/see them, although I do see them from a critical brokers perspective rather than a punters (still connected but no longer a broker, just obsessed and addicted to mortgages). I would be surprised at any dramatic decline in year on year mortgage lending caused by MMR.(other influences can not be ruled out).

Just been on MSE to see if MMR is being discussed...couldn't see anyone throwing their arms up in despair..everyone's getting mortgages and buying before prices shoot up.

:lol:

Seems that way in real life too. Some lenders taking longer to process, interviews taking longer but people are still getting their mortgages. Did you notice a few comments about surveyors down valuing properties? 5K here, 10K there, enough of them that I noticed on a quick read through. Interesting that no one over there picked up on it. Either the surveyors are being realistic or it could be that they are working with the lenders to get valuations to fit the mortgage affordability. Haven't seen anybody miss out on their chosen property.

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HOLA446

Your understanding of this is way above me... I just say things as I hear/see them, although I do see them from a critical brokers perspective rather than a punters (still connected but no longer a broker, just obsessed and addicted to mortgages). I would be surprised at any dramatic decline in year on year mortgage lending caused by MMR.(other influences can not be ruled out).

Seems that way in real life too. Some lenders taking longer to process, interviews taking longer but people are still getting their mortgages. Did you notice a few comments about surveyors down valuing properties? 5K here, 10K there, enough of them that I noticed on a quick read through. Interesting that no one over there picked up on it. Either the surveyors are being realistic or it could be that they are working with the lenders to get valuations to fit the mortgage affordability. Haven't seen anybody miss out on their chosen property.

I see...so MMR wont have any effect, but valuers are lowering their valuations to meet the lower mortgages.

I get it now...no price drops due to MMR...its the valuers...

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HOLA447

I see...so MMR wont have any effect, but valuers are lowering their valuations to meet the lower mortgages.

I get it now...no price drops due to MMR...its the valuers...

:) I think it's unlikely that any valuer should do that but it did occur to me. Truth is I don't know - how could I? These are such corrupt times, no body could ever actually know any thing - the lengths that government and lenders will go to to save themselves is surreal. Personally I don't think the criteria set down by MMR is stringent enough to have a huge effect on lending. There are too many ways around it.

Edited by little fish
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HOLA448
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HOLA449

So many things wrong with that MX story.

Question regarding MX. I had the great displeasure of meeting certain members of UKAR between april 2010 until Jan 2012, when i fell into 8k arrears with MX having moved my property management agent and the old rents despite my efforts still being sent to the old company. Suffice to say I never got them.

So they fell into £8k arrears through rent being sent to the wrong agent. Simple admin error. Why wasn't this recovered? Legal issues with previous agent?

The gentleman who visited me at my home, and interacted daily almost with my highly supportive agent( Mr Jack Vincent) , through out this interaction never actually send any correspondence to me as he failed to update my address records. No biggy, the bills were being paid on time.

So he had plenty of time to correct this issue, but couldn't be bothered. 'No biggy', until it was.

I had no money to repair my vacant properties and as a result they began to fall vacant. Inspite of this I managed after two years to clear the arrears

So it took two years to clear £8k arrears on a 66 property empire. Cracking yield there then. Pure capital gains business model by the sound of it.

When I asked UKAR why they had failed to inform me I was told by UKAR that they were not MX but their agent and although they had my correct address on file MX who issued the paperwork sent it to my previous address as I had failed to update their records.

Still no biggy?

They instructed agents, sold my property for a fraction of what they were worth

Probably a top heavy fraction.

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HOLA4410

Your understanding of this is way above me... I just say things as I hear/see them, although I do see them from a critical brokers perspective rather than a punters (still connected but no longer a broker, just obsessed and addicted to mortgages). I would be surprised at any dramatic decline in year on year mortgage lending caused by MMR.(other influences can not be ruled out).

No not at all. I am just looking at the data and trying to interpret. I would expect some effect or is it pointless regulation?

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HOLA4411

No not at all. I am just looking at the data and trying to interpret. I would expect some effect or is it pointless regulation?

I don't think the stress test to 7% is pointless. NZ have just put interest rates up, America's rates rose last year - it's the UK's turn next.

It was said back in the 2010/2011 reflation that the UK's biggest problem would be when there was a recovery because there is no way of putting up rates without causing a crash.

But from what we are told BOE are no and will not be putting up rates in any meaningful way. That's because of the low wage inflation and high government debt. The problem the regulators face is how to control aleady ou of conrol house price inflation?

All they can really do is restrict based on future rate rise 'predictions'/'forcasts' (7% yeah, my ass). If they go ahead restricting by 3.5x Wages then people will complain abd say that it's unfair.

If the regulators step in and say it's due to affordability, rates will rise and it's for your own good people will not complain.

I will reiterate, they need to take this approach because they cannot afford to raise rates without raising taxes to covering the higher borrowing costs.

As usual the UK is late to the party and the EU already put these rules in place (try taking a mortgage in Ireland) after their market crashed. Because he UK wouldn't let their market crash it now faces it's day of reckoning.

You try walking into an French, German, Isish or Spanish bank and asking to borrow 5 times or even 4 times wages. they would laugh you out of the branch (yes they still have branches in those countries)

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HOLA4412

I don't think the stress test to 7% is pointless. NZ have just put interest rates up, America's rates rose last year - it's the UK's turn next.

Eh? Do you mean the so called 'Taper Tantrum' increase in Treasury yields which ran up from historic lows last summer in anticipation of the commencement of the taper? Federal funds rate is right where it has been since 2008. New Zealand is actually raising its policy rate, which is I am shocked to learn at a bewildering 3%. Why doesn't their world end?

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HOLA4413
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HOLA4414
After historic bubbles such as the tulip mania, people often reported that they had been so caught up in the whole thing that it felt as if they were living in a dream state, being carried along on a wave without any sort of logical thought or reasoning that might have protected them from their own greed, stupidity and eventual, inevitable collapse.

The fact that none other than Sir Isaac Newton, considered to be one of the brightest men of his time, lost almost his entire fortune betting on the South Sea Bubble backs up this idea;

An early example is the case of Sir Isaac Newton and the South Sea Company, which was established in the early 18th Century and granted a monopoly on trade in the South Seas in exchange for assuming England’s war debt.

Investors warmed to the appeal of this monopoly and the company’s shares began their rise.

Britain’s most celebrated scientist was not immune to the monetary charms of the South Sea Company, and in early 1720 he profited handsomely from his stake. Having cashed in his chips, he then watched with some perturbation as stock in the company continued to rise.

In the words of Lord Overstone, no warning on earth can save people determined to grow suddenly rich.

Newton went on to repurchase a good deal more South Sea Company shares at more than three times the price of his original stake, and then proceeded to lose £20,000 (which, in 1720, amounted to almost all his life savings).

This prompted him to add, allegedly, that “I can calculate the movement of stars, but not the madness of men.”

http://www.zerohedge.com/news/2013-12-10/how-isaac-newton-went-flat-broke-chasing-stock-bubble

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HOLA4415

Then continues with two comments, which I'm interpret as landlords giggling that they can snatch at a cheaper price a house a younger buyer has been denied a mortgage for... then get EA to contact failed private buyer, and invite them to rent it from them. Then moves on to recent changes at Barclays for BTL and slight shiver from some of them. When just days before at least one guy was claiming MMR "big changes" no impact on BTLers.

Lost count of how many BTLers with 6 and 7 properties on just this page alone: http://www.propertytribes.com/start-preparing-now-big-changes-coming-btl-lending-t-9621-5.html

Make that 6 and 7 BTLs who are at various stages of getting their 'portfolio' repo-ed by UKAR.

Reading the 118 forum, the LL's seem to be struggling with wahts UKAR prupose.

It stands for UK Asset Recovery.

Its not UK Cheap Loans to Overleveraged Halfwits.

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HOLA4416

I guess from a lender's perspective MMR could, if they're not seen to be diligent, be like card protection or PPI mis-selling...only about a hundred times worse.

Look at it this way, legislation is put in place that mandates the lender to scrutinise the borrower's ability to pay back the loan, the borrower falls behind in repayments, the borrower then claims, "but it's not my fault, the bank checked my finances and approved the loan, they knew my car might breakdown/wife have baby/central heating need replacing etc, I trusted their judgement that this loan was reasonable, they didn't do their job so I shouldn't have to repay the loan". Court agrees with borrower.

Oh dear.

Solution? Lender asks every daft question possible in order to put a robust paper trail in place. Lender secretly hopes borrower will blatantly lie on written application, which would effectively indemnify them whilst still keeping plumpy bonus in prospect.

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HOLA4417

If Barclays are stress testing 125% rental cover at 5.79% from next week, that ought to kill BTL lending in many cases.

£100k of mortgage borrowings requires £5,790*1.25=£7,240 ish annual rental income, or £600/month.

Only those with pretty low LTVs need apply? A new entrant BTLer buying my place (rental income of about £750/month) would have to have a deposit of around £75k to borrow the £125k mortgage maximum. And for that they get a yield of sub3% after mortgage interest (at 3.29%) alone. Is it worth it?

Whatever limits MMR bring in for OOO, the bigger the limit for BTL loans.

Its nuts really. BTL loan had a low default because they've only existed since 2002ish.

As the cycle turns and more BTL default, the cost of BTL will go higher, and the LTV drop.

I would guess most post-2002 BTLs outside of London are under water.

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HOLA4418

http://forums.moneysavingexpert.com/showthread.php?t=4970496

Hi there - new to the forum but wondered if anyone could comment on my situation...

My broker had received a decision in principle from Nationwide for a three year fixed mortgage at 2.69% about three weeks ago - for £113,000. My salary is 29,000. I have a deposit of two thirds the value of the new house.

I go in today to finalise and am told that the maximum I can now borrow is now around £68 k !

I am a wee bit perplexed! I have no debts and assume a good credit rating! It's a drastic change - should I push my broker In case he has made a mistake or have the new new rules made such a difference?

Incidentaly, I have not been asked to answer that many questions regarding my outgoings at all.

Ties in with me not being able to borrow £100k on £35k

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HOLA4419
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HOLA4420

The fact that none other than Sir Isaac Newton, considered to be one of the brightest men of his time, lost almost his entire fortune betting on the South Sea Bubble backs up this idea;

http://www.zerohedge.com/news/2013-12-10/how-isaac-newton-went-flat-broke-chasing-stock-bubble

Ergo, we must all be smarter than Sir Isaac Newton. Great, innit? ;)

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