Tuesday, September 11, 2007

2008 will be an interesting year, and so 2009 and 2010…

US sub-prime turmoil claims first British victim

For the first time the word "contagion" is used by the CML "This appears to be an instance of a lender suffering as a result of the contagion of US sub-prime problems." and then goes on... "Most other lenders are managing by adjusting their product ranges and pricing.” oops... nice way of dealing with contagion... "Lenders have been increasing their rates for sub-prime borrowers in recent weeks as a result of turmoil in the credit markets. GMAC, Mortgages Plc, and Kensington Mortgages have increased their rates, while DB Mortgages, part of Deutsche Bank, is no longer accepting applications from first-time buyers on its sub-prime range of home loans." 2008 will be very interesting... 10% rates ahead!

Posted by confused76 @ 09:47 AM (757 views)
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5 thoughts on “2008 will be an interesting year, and so 2009 and 2010…

  • Amazing the comments made by CML and others in the article. Reminded me of Dad’s Army and shouting “don’t panic, don’t panic!”.

    They are quick to try and talk this down but it is a serious issue and note the point made, that lenders would not be affected as most of the loans will have been sold on!

    To whom?

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  • Cheekie Charlie says:

    .” Experts say that existing customers should not be affected by the move as most of the loans have already been sold on to investors.

    10% it will be.

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  • dohousescrashinthewoods says:

    A mortgage famine suppresses available buyers, constraining demand.

    Since a market is defined at the margin, a decrease in demand will knock prices, causing people to sell. Cue the same pattern we saw in America barely a year ago.

    It’s not the interest rate rises that are slowing prices (how does £20 a month kill finaces for more than a very few?) it’s the increasing difficulty of obtaining a mortgage.

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  • It’s a little bit like saying “we did see evidence of a lethal poison in the water supply but it’s okay because we bottled it and sold it to someone else”.

    Astonishing. To assume that level of naiivety is astonishing.

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  • Paul,

    Now remember, The Learned Guru and the CMLR have said there is no Sub Prime problem….

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