Tuesday, Oct 13, 2009

Could this be a test model for the UK?

Independant.i.e (via Bloomberg): Banks may buy back homes from struggling customers

BANKS and building societies may be forced to buy homes from people struggling to meet their mortgage payments and rent them back to them.

Posted by mr cobblepot @ 01:37 PM (1578 views)
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12 Comments

1. crunchy said...

Here we go. I was dreading this move long ago. It has started. Meet your new bankster landlord. If this really rolls out we are doomed

Mr Mainwaring.

It's not even interest only.

Tuesday, October 13, 2009 11:17AM I think I have made my point now. FTBers need not apply.

Tuesday, October 13, 2009 03:09PM Report Comment
 

2. mark wadsworth said...

Things are different in Ireland. There is, by any stretch of the imagination, no physical housing shortage. And the Greens have bullied FF into adopting Land Value Tax, or at least looking at it, so the banks will have to hand back a large chunk of the rent in tax. So it's the ideal form of shared ownership - the tenant is pretty secure, the banks get all the hassle and the government rakes it in. What's not to like?

Tuesday, October 13, 2009 03:17PM Report Comment
 

3. garch said...

More sickening moral hazard.

Nothing wrong with repossession - punishes both guilty parties equally.

Tuesday, October 13, 2009 03:27PM Report Comment
 

4. crunchy said...

2. mark wadsworth said What's not to like?

Mark imagine if this were to be rolled out over here it is BTL all over again but this time directly with the banks.

I do not see any chance of a housing crash in this senario. It also takes the pressure off the banks to lend and who says it has to be

shared ownership if the idea mutates over to England. I just don't like the idea of a nation renting off the banks. They have too much power

already. Maybe I am being cynical. I wonder why after all that has already happened!

Tuesday, October 13, 2009 03:31PM Report Comment
 

5. mark wadsworth said...

Crunchy, the caveat is that they might have LVT. Once you have that everything else falls into place. The banks can get away with outrageous mortgage advances and then increase interest rates as high as they like, so you might end up paying far more in interest than you would do in rent. But if everybody were renting, nobody would be paying more than market rent, by definition. And the government can recycle the LVT receipts as tax cuts elsewhere.

Tuesday, October 13, 2009 03:40PM Report Comment
 

6. the number cruncher said...

I love the doublethink - The Government will force the banks or is that the banks will force the government to prop up prices forever.

Doubleplusggod - time for my 5 minute hate...

Tuesday, October 13, 2009 03:40PM Report Comment
 

7. crunchy said...

5. mark wadsworth

I wish I could share in your optimism. I can't.

Tuesday, October 13, 2009 03:52PM Report Comment
 

8. the number cruncher said...

Mark

I think the good bits of this article like banks buying to rent etc will not happen - the tone of the piece looks like it is trying to show the Irish Government being tough, when the reality is the banks will be dictating to the Government.

The Irish Government subsidising mortgage repayments does not sound that wonderful to me. It will bankrupt the taxpayer and just prop up banks and house values. The sirens of moral hazard are sounding all around me

Tuesday, October 13, 2009 03:55PM Report Comment
 

9. inbreda said...

"The sirens of moral hazard are sounding all around me"

the uk government has plenty of experience in moral hazard. They are just the shysters for the job.

Tuesday, October 13, 2009 04:00PM Report Comment
 

10. cyril said...

Does the former mortgagee have any more security of tenure than any other renter? If not, it seems like a good idea. Better than leaving the house empty.

Tuesday, October 13, 2009 05:21PM Report Comment
 

11. This comment has been removed as it was found to be in breach of our Blog Policies.

 

12. fallingbuzzard said...

I can smell two things. 1. An OFT investigation, after all this will have the same swindles in it as straightforward sale and rentback. And 2. an FSA investigation. This will be deemed as market abuse.

Tuesday, October 13, 2009 10:20PM Report Comment
 

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