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bear_in_mind

Will Lenders Keep Rates Low To Avoid A Hpc?

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It occurred to me that because this crash is being caused by tightening lending policies, lenders may have the power (to some extent) to prevent it from deepening - by not raising mortgage rates too high. In a serious crash they stand to lose billions.

Just a thought...

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It occurred to me that because this crash is being caused by tightening lending policies, lenders may have the power (to some extent) to prevent it from deepening - by not raising mortgage rates too high. In a serious crash they stand to lose billions.

Just a thought...

Seriously doubt that in my experience lenders are trying to repossess as quickly as possible not trying to help just sell the asset as quickly as possible

:o

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It occurred to me that because this crash is being caused by tightening lending policies, lenders may have the power (to some extent) to prevent it from deepening - by not raising mortgage rates too high. In a serious crash they stand to lose billions.

Just a thought...

BUT .......

They 'aint lending!!!!!!!!!!!

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It occurred to me that because this crash is being caused by tightening lending policies, lenders may have the power (to some extent) to prevent it from deepening - by not raising mortgage rates too high. In a serious crash they stand to lose billions.

With securitised mortgages, it's not under the banks' control since the mortgages are not on their books.

For unsecuritised mortgages, this might be a consideration. However, if a lender keeps rates low enough to avoid foreclosures, they lose out on charging higher rates to the many people who could pay. Not every property will be in NE (yet) -- in a falling market, lenders might take the view that it's better to trigger repossession sooner, rather than later. Where there is NE and the borrower is in employment, lenders might be fairly confident of recovering the shortfall (by installments if necessary).

It's not as if lenders are not desperate for money themselves...

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It occurred to me that because this crash is being caused by tightening lending policies, lenders may have the power (to some extent) to prevent it from deepening - by not raising mortgage rates too high. In a serious crash they stand to lose billions.

Just a thought...

You are right. The banks are not operating in a rational manner. Maybe that's because banks operate as part of the banking system, and the system requires trust and confidence. Clearly that's not there otherwise the inter-bank rate would have come down when the BoE lowered rates. Instead the gap between the LIBOR rate and the BoE base rate widened. A bank that lowered its rates and relaxed its lending policies while others did not might find it difficult to raise funds and end up like NR and B&B. :blink:

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  • 399 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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