Tuesday, July 3, 2007

Good news… “only” 15% of UK mortgages are subprime!

FSA raises British subprime concerns

The Council of Mortgage Lenders points out subprime mortgage lending by its very nature is riskier than conventional mortgage lending. It also notes there are fundamental differences between the subprimemarket of the US and that of the UK, where lenders have not relaxed their lending criteria so aggressively as in the US. US, loan-to-value ratios - which show the loan as a proportion of the value of the property - have been as high as 100 per cent. In the UK, only 15 per cent of lending is at 90 per cent or more. So prudent!!

Posted by confused76 @ 10:36 AM (313 views)
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4 thoughts on “Good news… “only” 15% of UK mortgages are subprime!

  • ……..that they know of!

    (Some borrowers may have lied and some lenders may have misrecorded certain loans!)

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  • even if true, even if your loan is only twice your salary, if you are out of work for 3 months you are toast

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  • “The Council of Mortgage Lenders points out subprime mortgage lending by its very nature is riskier than conventional mortgage lending. It also notes there are fundamental differences between the subprimemarket of the US and that of the UK, where lenders have not relaxed their lending criteria so aggressively as in the US.”

    The CML is hardly going to disclose that their members might also have been overgenerous with credit. However, the fundamentals of financial products, risk and credit market are the same in the US as the UK …

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  • Disillusioned says:

    “loan-to-value ratios – which show the loan as a proportion of the value of the property – have been as high as 100 per cent. In the UK, only 15 per cent of lending is at 90 per cent or more.”

    How beautifully spun! It’s still possible for the first statement to apply to the UK, since it’s possible for some loans to be 100% or more within the 15%!!!

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