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"darling To Push ‘gold Standard’ Mortgages"

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All mortgages in Britain will be in effect graded and the least risky will be given an official seal of approval under plans designed to reopen the market for wholesale mortgage financing to be unveiled in next week’s Budget.

Alistair Darling, the chancellor, will publish plans that will see a “gold standard” kitemark for batches of mortgage-backed securities that comprise only those loans that meet higher standards of creditworthiness and quality thresholds.

Angela Knight, the chief executive of the British Bankers’ Association, on Tuesday said there was “merit in the proposal” because transparency and simplicity were something to be welcomed.

But she added there must be flexibility in the types of mortgages to be included in a gold standard securitisation because there was a “risk in stigmatising non-conforming mortgages”.

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will publish plans that will see a “gold standard” kitemark for batches of mortgage-backed securities that comprise only those loans that meet higher standards of creditworthiness and quality thresholds.

The good ones - not much more than 18ct carat plated gold. The other ones, they get a shitemark instead.

Edited by OnlyMe

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Guest tenant super
yer you know why the bust is here.

Exactly, surely she must appreciate that the reason that these products are to be graded is so that the appropriate premium can be paid to investors to take on the crud, so as to avoid the problems we are experiencing now.

I wonder what grade Northern Rocks book averages at?

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Who is going to give this seal of approval?

Is he saying that the govt. are going to be like a rating agency with the taxpayer under-writing any losses?

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I have an idea, they can rate these gold plated securities with a letter system, for example call it an AAA rating, then go down from there.

The AAA will have little risk so are bound not to default. So these will have lots of demand.

:lol::lol::lol::lol::lol:

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Angela Knight, the chief executive of the British Bankers’ Association, on Tuesday said there was “merit in the proposal” because transparency and simplicity were something to be welcomed.

But she added there must be flexibility in the types of mortgages to be included in a gold standard securitisation because there was a “risk in stigmatising non-conforming mortgages”.

A risk that people might see them for the manure that they are?

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There may be merit in this

It would be good news if in order to get the mortgage the borrower had to be tax compliant and the declared income must agree with filed tax returns of the past and the LTV must be no more than 75% on a defined property type i.e. outside a flood zone, freehold or long term leasehold etc etc. Lending multiples of 3 X single rising a little if the income is high and say 2.25 times joint or 3 X the main breadwinner and 1 times the other

This will bring things back to normal lending and will be in the interest of all members who wish to see a correction in prices brought about by the reintroduction of prudent lending rather than an economic depression/recession.

The price of sub prime lending will become much higher and so would BTL except for those with substantial deposits i.e. 25% plus

Edited by The Ginger Winger

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A risk that people might see them for the manure that they are?

My thoughts exactly, and the new sub prime Gold standard will be only 20% gold at best.

Hang on, are we allowed to mention the word gold in the main forum? :-)

Edit to add sub prime.

Edited by trekking

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It would only work if the potential purchasers of these "gold" rated mortgages actually trust whoever rates them as such.

I'm not clear as to who this actually might be in this latest brainwave from uk.gov.

Is it the FSA? perhaps not such a creditable agency at the moment? Whoever does it, if they are truly independant then I can only see it as being *very* expensive and time consuming job to do a creditable job of rating the many millions of instances of outstanding mortgage debt we have in this country.

Who pays for this? The taxpayer? How long would it take? Quick enough for Darling to have it "implemented" later on in this year? Surely that's not doable?

There are two things I smell here.

Firstly that in order for it to work in a reasonable amount of time it must involve lenders "valuing" the mortgages they have for sale themselves.

Now what in that is so different from the current situation?

The second bad smell is what might be different in the above. Is Darling planning to use taxpayers money to underwrite this "gold standard" on the word of the banks themselves as to how gold plated they say their mortgages are?

It's not like there isn't a precedent ....

On the other hand, I Like the idea of stigmatising(quicky, bloodily and painfully) all the cr4p mortgages, all the unaffordable ones, all the liar loans, all the 125% LTVS, and the negative equities.

That is, after all, pretty well what we on HPC want to see, is it not?

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I fear they mean to have tax-payer backing. What else could differentiate a kite-marked mortgage from an AAA-rated mortgage?

Perhaps more importantly, is it really desirable to re-start the mortgage securitisaiton market? Should we not be going back to more sensible lending practices, at the heart of which must lie the fact that the lender has an incentive to understand the risk?

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a new silver standard mortgage would be like gold but not so golden, and we could have wheat standard mortgages underwritten by the plentiful crops that can be grown in the gardens... or maybe we are just going back to the old days....

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Nothing will come of it - nothing ever does.

This government has only ever dealt in platitudes. It is driven by a desire for change - mostly due to old-style socialist envy - and prefers to tear down the old before devising and testing the new that is supposed to replace it. Moreover, the new is usually no more than wishful thinking, a platitude that this crowd of dumbwits believes will magically become reality if repeated often enough. They are intellectual retards who know how to spin, how to come up with endless initiatives, consultations, reviews, enquiries, focus groups ad nauseaum, but none of them could IMPLEMENT the proverbial pee-up in a brewery let alone implement a policy. They're just a load of gobby, self-serving, power-hungry hypocrites of the do-as-I-say-not-as-I-do variety, who delight in nothing more than being obnxiously bossy when it comes to interfering in the lives of others, and behave like pigs at a trough when it comes to their own lives.

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im more upbeat about this

lets suppose the gold standard is 3.5 times income, 15%deposit, similar stuff to the good old days, then effectively he'd be changing the market psychology to reality

but sadly that would mean a fall in house prices to a new equilibrium and i'm not sure that's what the government wants

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:lol::lol::lol::lol::lol::lol:

This made me laugh this morning!!!!

So, the government is going to 'rate' mortgages? The same government who said Northern Rock mortgages are 'sound' and 'high quality'?????

Then I get to this bit:

But she added there must be flexibility in the types of mortgages to be included in a gold standard securitisation because there was a “risk in stigmatising non-conforming mortgages”.

:lol::lol::lol::blink:

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lets suppose the gold standard is 3.5 times income, 15%deposit, similar stuff to the good old days,

But everyone knows that that's what a sensible mortgage looks like so what would it achieve? They talk about reopening the securitisation markets as if they are a branch of WHSmith's that's closed for refurbishment.

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will publish plans that will see a “gold standard” kitemark for batches of mortgage-backed securities that comprise only those loans that meet higher standards of creditworthiness and quality thresholds.

The good ones - not much more than 18ct carat plated gold. The other ones, they get a shitemark instead.

:lol::lol::lol:

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Research by Morgan Stanley shows that the leading seven UK mortgage lenders have £206bn in outstanding securitised mortgages, some 28 per cent of mortgage assets, and would face “severe problems” if the market does not unfreeze soon.

206bn, and that's just the outstanding.

Can't they just reign in new lending ?

Or is this more seven Northern Rock's on the horizon?

Edited by Ash4781

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206bn, and that's just the outstanding.

Can't they just reign in new lending ?

Or is this more seven Northern Rock's on the horizon?

They weren't quite quick enough to get the trash off their books, not as quite as clever as they though they were.

Now, as a result the central bankers are desperate to drop rates to manipulate the investment market and drive investors back into accepting this mortgage sludge, something which they did in the first place and played a great part in the creation and distribution of this effluent in the first place. Save the profits of the banks, damn everybody else with inflation.

Quite unbelievable when you think about it.

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  • 298 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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