Mortgage Regulations Having More Effect Than Thought?

[Venger]

My take is that they don't expect the new mortgage rules to have anything more than short term impact.

Yes I have heard that line too.... it is called 'maintaining the morale of the people' (or vested interests), even where the authorities expect the opposite.

Tell it to Ben Bernanke... he hasn't found it easy to remortgage. We will hear a lot from the authorities how it's the banks, not their fault, unable/unwilling to lend to anyone other that high quality applicants with good deposits / incomes / employment positions.

And price slides will see them tighten up lending even further; only lending to high quality applicants.

Edit: Bernanke spelling.

Edited October 12, 2014 by Venger

[Andy T]

http://www.thisismoney.co.uk/money/mortgageshome/article-2853236/MORTGAGE-EXPERT-new-mortgage-rules-really-making-harder-older-borrowers-home-loan-want.html

Not really an interesting article but some of the comments raised a smile...

17/12/2014 " I work for a mortgage adviser and have done for 15 years, we have never known so many applications declined and now the phones are so quiet as applicants decide to sit tight waiting for the day the banks lend again, its ridiculous how these mortgage lenders have tightened the rules so much they will put themselves out of business "

10/12/2014 "The new mortgage regulations are going to "put the tin hat" on the housing market. I recently applied for the same mortgage that I currently have and wanted to use it to buy a new house. The rate is the same, the LTV is 35%, I earn a six figure sum p.a. and yes you guessed it I was declined. Eventually after bitterly complaining I was approved but the whole incident was a farce from start to finish. So thanks HSBC for ruining my house purchase and be warned we are on the cusp of a major property collapse."

[Maynardgravy]

http://www.thisismoney.co.uk/money/mortgageshome/article-2853236/MORTGAGE-EXPERT-new-mortgage-rules-really-making-harder-older-borrowers-home-loan-want.html

Not really an interesting article but some of the comments raised a smile...

17/12/2014 " I work for a mortgage adviser and have done for 15 years, we have never known so many applications declined and now the phones are so quiet as applicants decide to sit tight waiting for the day the banks lend again, its ridiculous how these mortgage lenders have tightened the rules so much they will put themselves out of business "

10/12/2014 "The new mortgage regulations are going to "put the tin hat" on the housing market. I recently applied for the same mortgage that I currently have and wanted to use it to buy a new house. The rate is the same, the LTV is 35%, I earn a six figure sum p.a. and yes you guessed it I was declined. Eventually after bitterly complaining I was approved but the whole incident was a farce from start to finish. So thanks HSBC for ruining my house purchase and be warned we are on the cusp of a major property collapse."

Surely they know that the latter is a good thing, or do they actually want to borrow more than they need to?

[winkie]

What about the ones that have £100k deposit, want to borrow £200k and earn two pounds fifty.....they think because they have a big deposit they will be lent a big mortgage when they don't have the income to pay it back.....magic money.

Edited December 23, 2014 by winkie

[eric pebble]

Hell no, it's nothing to do with value, it's all to do with cheap credit and scarcity. It'll just take the mortgage industry a little while to figure out how to work around the new rules then we'll be back to business as usual with almost free credit for anyone with a pulse. When there is no downside for the people doing the selling, that's the way it will always be.

i.e. PREDATORY LIAR LOANS; THE KEY to hpi.......

[spyguy]

http://www.thisismoney.co.uk/money/mortgageshome/article-2853236/MORTGAGE-EXPERT-new-mortgage-rules-really-making-harder-older-borrowers-home-loan-want.html

Not really an interesting article but some of the comments raised a smile...

17/12/2014 " I work for a mortgage adviser and have done for 15 years, we have never known so many applications declined and now the phones are so quiet as applicants decide to sit tight waiting for the day the banks lend again, its ridiculous how these mortgage lenders have tightened the rules so much they will put themselves out of business "

10/12/2014 "The new mortgage regulations are going to "put the tin hat" on the housing market. I recently applied for the same mortgage that I currently have and wanted to use it to buy a new house. The rate is the same, the LTV is 35%, I earn a six figure sum p.a. and yes you guessed it I was declined. Eventually after bitterly complaining I was approved but the whole incident was a farce from start to finish. So thanks HSBC for ruining my house purchase and be warned we are on the cusp of a major property collapse."

Arn't the new rule cos the banks really did put themselves out of business - by going bust???

I don't believe these 'I earn xxxxx and the bank refused me'.

They are refused because they earn xxxxx but have borrowing of xxxxx*3 of cars, BTLs, misc. cr.p.

[dances with sheeple]

Arn't the new rule cos the banks really did put themselves out of business - by going bust???

I don't believe these 'I earn xxxxx and the bank refused me'.

They are refused because they earn xxxxx but have borrowing of xxxxx*3 of cars, BTLs, misc. cr.p.

Neither do I, the bank sees them as a spent force now, too much debt so no more debt, just keep paying the debt you do have.

[spyguy]

I posted a while ago about a couple I sort of know from my home village.

Her 25, works part-time as hairdresser, seasonal job as waitress.

Him 28ish - I thought he worked in 'social enterprise' - contracted social worker for the council, doing stuff the council does not want to do or does not have permanent funding for.

In the summer (July) they had just completed on buying a 230K house. She popped out her first kid in May.

This is in area where jobs are few and far between and 20k is a very good wage.

AFAIK neither have won the lottery. Her family have been scratting for money in all the years I've known them.

His - an unknown to me.

Anyhow, the update to the story is that I've found out he's not earning 20k. He works as part-time barman FFS!

At a rough guess, that's a couple who are doing ~30h between them on minimum wage. I would guess tax credits kick in a bit. But FFS!

Even making the unlikely assumption of a 30% deposit (~190k mortgage), thats ~10x joint income.

These sort of cases make me wonders who's the most fcked - them or the country?

[jiltedjen]

banks are still not safe, I wouldn't trust them at all. No sensible lending. like the railway crisis it will take a second collapse until it's finally sorted.

In the case above, they will probably barely make the payments, eventually getting sick of having zero money and living off beans with no heating.