Wednesday, April 4, 2007

Lendors say the US issues will not spread here but withour giving any solid reasons

Replay of U.S. mortgage blues unlikely in Britain

LONDON (Reuters) - The crisis affecting the U.S. mortgage market has been a wake-up call for Britain's mortgage lenders but most are confident a similar storm will not occur this side of the Atlantic Not everyone is so sanguine. Capital Economics' Stansfield reckons that simply because the fault lines in Britain's mortgage market are different from those that triggered the U.S. crisis does not mean Britain is immune from further problems. While loan-to-value ratios are generally lower in Britain, he points out that lending as a proportion of income is actually higher.

Posted by cash_buyer @ 02:39 PM (463 views)
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4 thoughts on “Lendors say the US issues will not spread here but withour giving any solid reasons

  • Nice post, very interesting.

    There was this quote

    “UK adverse credit lenders have not relaxed underwriting criteria, introduced riskier products and adopted risk-layering practices in the way that has occurred in the United States.” Which whilst true, we haven’t “copied” the US we have been sailing very nearby.

    I think the final comment is the one to remember.

    “With the benefit of hindsight, it may well turn out that growth in mortgage credit has run too far,” he warns.

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  • “Britain’s subprime sector, which provides loans to people with a poor credit history, is far smaller and better regulated. More importantly, the property market remains in rude health with house prices rising close to 10 percent a year.”
    The first sentence is wrong, Britain subprime sector for secured loans is NOT regulated, banks act based on their commercial judgement.
    The second statement is circular… property prices are fueled by credit and they keep rising, so therefore the credit market is in good health !? sorry which one is the cause, which one is the effect…

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  • japanese uncle says:

    Certainly sub-prime specialists like New Century does not exist in the UK, but the considerable portion of ‘normal’ redidential mortgage risks dealt with by ‘regular’ mortgage providers such as Nationwide, Halifax, etc are in fact ‘full-fledged sub-primers’ borrowing money on the false premises in terms of their capability to repay typically by telling lies about their annual income. Of course these cheap conmen are fully aware that they are liars themselves. Suggest climbing up to the top of BT Tower and jump, to be reborn a genuine person.

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  • “And while 80 percent of U.S. subprime lending is on variable rates, typically with an eye-catching introductory offer, this is far less common in Britain where regulators require “stress testing” to check affordability over the longer term.”

    Wow , like a British 2 year fixed rate mortgage deal is now considered a non-variable rate . It’s frigging variable after the 2 year deal has run out .

    And the British regulated loans require stress testing ???? Uh !! ??

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