House Price Revison (2003) - This is why we are going to have a 50%+ Crash

adr0ck

hethmar wrote: »

No you dont have to. He paid attention, he questioned the product and was assured as a professional graduate it was kosher. Again, your point is? I have been honest and you seem to think you are being clever - sadly you arent.

what!!!

you say in your original post that your son knew it was dodgy?

if your son is a professional graduate whose wage increased by 500% over 2 years then i would have thought he would have enough about him to know that it was dodgy

don't get upset with me because your son committed fraud

Dithering_Dad

Oh look, another thread about 50% drops.

MODS: Can these all be merged please, they're clogging up the board and it dilutes the debate.

hethmar

adrock - go and find something useful to do. Again, you havent got the sense to follow the thread. If you have no useful contribution to make to the discussion, dont say anything at all.

carolt

Of course it was widespread - we had the same experience of a broker encouraging me to overstate my earnings to get a mortgage (ie lie). We didn't - partly as OH is pathologically honest and lying on official forms to be allowed to borrow huge multiples of our then earnings seemed like a bad idea...

We had kids too, making the option of taking risks much less appealing than it might have been to a 20 year old with nothing to lose. Even though the likelihood was that our salaries would continue to rise. (They have.)

Don't regret it - identical houses now back to what they would have cost then, and falling... (And we've since had another baby, so the house in question wouldn't have been big enough anyway.)

But really just another example to show how common it was - everyone knows someone who lied to buy, I'm sure, whether they are aware of it or not.

Cannon_Fodder

Just because people are bright does not mean they have the common sense, worldly experience, and chutzpah to tell a mortgage broker where to get off...

I actually commend hethmar's honesty, so that we don't get HPC-deniers saying EAs and Mortgage brokers are the salt of the earth, and that any inappropriate actions are all urban myths, that didn't stoke the bubble.

WTF?_2

adr0ck wrote: »

what!!!

you say in your original post that your son knew it was dodgy?

if your son is a professional graduate whose wage increased by 500% over 2 years then i would have thought he would have enough about him to know that it was dodgy

don't get upset with me because your son committed fraud

It's not really helpful to continually berate someone about some minor indiscretion their son may have committed half a decade ago.

As the show illustrated, for quite some time it has only been possible to get a mortgage in many expensive areas by inflating your claimed income. The practice was encouraged by brokers and the FSA looked the other way. Eventually, restrictions were eased to allow official >3.5x multiples rather than any action being taken.

WTF?_2

mizzbiz wrote: »

Can anyone explain what's in the programme?

I have mobile broadband so if I watch it it will kill my limit :-)

Interesting that you mention it was five years ago now....

I wouldn't burn up your limit on it but it is definitely worth a watch if you get the chance on a non-mobile broadband connection.

Basically it's an expose of how widespread 'liar loans' were back in 2003/2004. You weren't supposed to loan more than about 3.5x single salary back then but such was the pace of HPI that there was widespread 'inflating' of declared salaries in order to allow people to get on the property ladder. Otherwise FTBs in many areas wouldn't have had a prayer. Of course, this behaviour was self-defeating as it just pushed prices up even further instead of them being throttled back to an affordable level by a lack of FTBs with funds.

The point was made that house prices were stupidly out of control and out of proportion to income even back then. When you consider all that has happened since then, that's really shocking.

Also, the regulatory authorities seemed to be not the least bit interested in what was going on despite being told. Rules were later changed to allow silly multiples of salary to be officially loaned. The grounds seemed to be that in an environment of rampant house price inflation it was now safe to borrow massive amounts. Complete madness. This was the point at which something could have been done about the crazy house price bubble mess and instead, it was encouraged by the people in power.

hethmar

It is horrifying that no action was taken following that documentary. They actually mention Northern Rock as one of the suppliers of this product dont they. As you say, those products delayed the bubble bursting 5 years back.

carolt

!!!!!!? wrote: »

It's not really helpful to continually berate someone about some minor indiscretion their son may have committed half a decade ago.

As the show illustrated, for quite some time it has only been possible to get a mortgage in many expensive areas by inflating your claimed income. The practice was encouraged by brokers and the FSA looked the other way. Eventually, restrictions were eased to allow official >3.5x multiples rather than any action being taken.

Absolutely. The shocking thing is that we're all facing recession at best or possibly worse, paying for the banking crisis from our taxes (based on poor mortgage-lending decisions like those shown here) and yet none of those responsible for this mess, from the individual brokers, up to the FSA and Gordon are being put on the hook for it. A huge !!!!-up on a global scale, and yet NO-ONE IS RESPONSIBLE. Of course a child could have seen it coming, let alone the great minds in this country and abroad.

But it was in all their interests to turn a blind eye.

Was listening to an interesting programme on Radio 4 last night about 8pm, which was reporting the huge legal actions now being started against the banks for misselling - this appears to be of funds to investors rather than mortgages to individuals.

How long before the huge sums already starting to be paid out on this, and further cases, really hit home?

hethmar

You would think that now there would be a check on brokers and the products they have sold and some fines being made, at the very least, wouldnt you.