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Bounce back loans being used as property deposits


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Not sure if this has been brought up here (did have a look but couldn't find), but people are pushing the £50k taxpayer funded bounce back loans to be used as bloomin BTL property deposits. 

Its all self certification (madness) with 100% government backing so no risk to the lender (insanity). So depressing. 

The guy is called Paul Smith and hes doing a 2pm webinar on this use of taxpayers funds if anyone wishes to join.

 

 

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This assumes they'll be handed a BTL mortgage to begin with.  It's looking really ugly for the commercial property sector as it is.  Factor in the soon to be arriving redundancies...

They can be bag-holders if they want to.  Their choice.

Edited by blackhole
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11 minutes ago, blackhole said:

This assumes they'll be handed a BTL mortgage to begin with.  It's looking really ugly for the commercial property sector as it is.  Factor in the soon to be arriving redundancies...

They can be bag-holders if they want to.  Their choice.

I dont think thats the case at all. 

Shopping centers which are illiquid at the best of times, nobody is lending against. 

BTL mortgages are back being offered at below 2% interest for 75% LTV or above. 

 

Lenders don't see the same risk at all. 

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20 minutes ago, Ghostly said:

Would probably also have to involve mortgage fraud if you lied about the source of your deposit. Banks tend to ask where you got your deposit from and ask for proof in the form of bank statements. 

Good point,

  • Mortgage fraud 
  • Money laundering
  • Misuse of public funds

 Probably looking at jail time for that.

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37 minutes ago, captainb said:

BTL mortgages are back being offered at below 2% interest for 75% LTV or above. 

Lenders don't see the same risk at all. 

Nationwide and similar certainly don't, agreed.  But that was before the proposed extended mortgage holidays (and the one that just took effect), nevermind waves of redundancies.  

Again, I welcome our new bag-holders.  Choices choices.

Having being involved in a FS Originations project, I can tell you even back in 2016 standards were certainly tightening - for Tier1's at least.  

Edited by blackhole
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3 minutes ago, blackhole said:

Nationwide and similar certainly don't, agreed.  But that was before the proposed extended mortgage holidays (and the one that just took effect), nevermind waves of redundancies.  

Again, I welcome our new bag-holders.  Choices choices.

Maybe, all im saying is they are not risk profiling BTL as high risk at the moment in knowledge of that expectation, rather given a sub 2% rate on 80% LTV very low risk. 

 

 

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10 minutes ago, captainb said:

Maybe, all im saying is they are not risk profiling BTL as high risk at the moment in knowledge of that expectation, rather given a sub 2% rate on 80% LTV very low risk. 

True, but at the same time removing such products / offering from the market would kill their valuations for existing lending.  Like all ponzi's the show must go on.   As pointed out they have zero moral hazard to concern themselves, BoE will bail them out always right?  Ala 2008.

Edited by blackhole
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12 minutes ago, blackhole said:

True, but at the same time removing such products / offering from the market would kill their valuations for existing lending.  Like all ponzi's the show must go on.   As pointed out they have zero moral hazard to concern themselves, BoE will bail them out always right?  Ala 2008.

Quite; although they did pull them all when surveyors couldn't work. 

Its been a conscious choice to bring them back, both at that interest rate and level of LTV, in full knowledge of expected levels of redundancy etc. 

Theres always another viewpoint.

In this case the banks don't share the same risk perspective. One would imagine the hedge is worst case lots of money will just be printed inflating it all away. In such an environment having cash on your balance sheet is the worst asset. 

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6 minutes ago, captainb said:

In this case the banks don't share the same risk perspective. One would imagine the hedge is worst case lots of money will just be printed inflating it all away. In such an environment having cash on your balance sheet is the worst asset. 

They don't share risk - full stop.  They will be made whole again, at whatever cost it takes it seems.  Hence the show must go on. 

Therefore my arguement is banks etc behave much like a drug addled mind.  Therefore is watching their behaviour telling you much at all about the current state of how they perceive things?  That's what i'm trying to point out.

Your points are valid, they could have forecasts which says "it'll blow over" but from the Tier1 reports i'm seeing that certainly isnt the case.

But yes right that in the medium term cash could be well and truly toast.  It's a genuine path they could consider.

Edited by blackhole
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9 hours ago, captainb said:

Not sure if this has been brought up here (did have a look but couldn't find), but people are pushing the £50k taxpayer funded bounce back loans to be used as bloomin BTL property deposits. 

Its all self certification (madness) with 100% government backing so no risk to the lender (insanity). So depressing. 

The guy is called Paul Smith and hes doing a 2pm webinar on this use of taxpayers funds if anyone wishes to join.

 

 

I hope he does it. Let me explain one thing. In all property crashes the government tries to stop the bubble exploding. The most important factor for us is not how long it takes to pop (one year earlier or later), but how deep it goes in the decline. If prices take one more year but then drop -60% in 5 years, it’s a good trade off. A lot of the measures and approaches I have seen so far just delay the pain t next year. If they accumulate all the pain in 2021-23... If prices are lower by then (which is what everybody thinks)... the market will just implode.

Edited by Burbujista
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42 minutes ago, blackhole said:

Worth mentioning that the 50k?  It's upto 50k depending on your company's turnover.  Many wont be able to claim for the full 50k.  

Its self certification. Have 6 entities with no turnover in any of them? self certify get the £300k and move on.

Sadly with 100% taxpayer guarantee i cant see the banks caring / chasing. Ultimately that costs money where as stick on the pile and claim from the taxpayer is free.

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1 hour ago, Warlord said:

I'd ;like to know if this guy and his followers been arrested yet? 

Or are they actually pulling this off?

The cash is being paid out to them on a self certification basis. With media claiming that CV loans were taking too long (you know those pesky fraud and credit checks), these bounce back loans were cash in 48 hours on self certify. There are no checks and bizarrely no directors personal guarantee. Means if you get the cash and your company unfortunately collapses after declaring a dividend/paying a salary there is not a lot of options. 

The mortgage issue is real - seems latest is using the cash with existing funds buying property in cash at auction.

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Just to add to this nonsense this was on the first day:

"As of 4pm on Monday, HSBC said it received 34,500 applications – 19,800 from existing customers, totalling £650m, and 14,700 from new customers.  The average loan size is £37,000.

Santander received 19,977 applications, offering 15,414 loans worth £431m. The first customer had the money in their account at 10am on Monday morning."

You are telling me there were 14,700 of £200k turnover businesses without company bank accounts who applied on the first morning?

And that cash out 10am when applications opened 8am means any checks are being carried out.

 

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1 minute ago, Warlord said:

Captain: Has he presented any evidence of obtaining the loan? like documents or statements or even the property he's acquired?

Yes in his account on the webinar from multiple entities.

Also claimed anyone saying it is immoral/wrong is just a "Neg-Head"

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Just now, captainb said:

Yes in his account on the webinar from multiple entities.

Also claimed anyone saying it is immoral/wrong is just a "Neg-Head"

It's going to end in tears. I hope many people don't follow him off the cliff! 

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7 minutes ago, captainb said:

Just to add to this nonsense this was on the first day:

"As of 4pm on Monday, HSBC said it received 34,500 applications – 19,800 from existing customers, totalling £650m, and 14,700 from new customers.  The average loan size is £37,000.

Santander received 19,977 applications, offering 15,414 loans worth £431m. The first customer had the money in their account at 10am on Monday morning."

You are telling me there were 14,700 of £200k turnover businesses without company bank accounts who applied on the first morning?

And that cash out 10am when applications opened 8am means any checks are being carried out.

 

Nada, its a joke. 

I have friends who are lining up property purchases. We're going to see an epic write off a few years time. 

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Just now, Warlord said:

It's going to end in tears. I hope many people don't follow him off the cliff! 

He claims that everybody else moving to the cliff edge ?

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