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FSA Rejects LTV/LTI Mortgage Caps......
HAMISH_MCTAVISH
Posts: 28,592 Forumite
Financial TimesJon Pain, managing director of retail markets for the FSA said the level of a household’s disposal income, after mortgage payments, was a more appropriate figure than loan-to-value or loan-to-income ratios.
“There are lots of mortgage players out there at the moment who have very sophisticated tools to assess genuine affordability and even the ability to withstand interest rate changes,” he said.
“That’s what we need to get the whole mortgage market adopting – as opposed to necessarily a simple-income multiple. That’s not a true test of affordability.
Leslie Titcomb, sector leader for retail intermediaries and mortgages at the FSA, added that there were also concerns about the potential impact on first-time buyers.
“We are also concerned that having a fairly blunt tool like a cap on loan-to-values could have an effect of denying first-time buyers access to the market, which would be unfortunate,” she told the committee.
:T:T:T:T
Game on.
That was the last great hope of the bears.
The next booms gonna be huge........
“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”
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Comments
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HAMISH_MCTAVISH wrote: »Financial Times
:T:T:T:T
Game on.
That was the last great hope of the bears.
The next booms gonna be huge........
Why you clapping? Basing it on disposable income, when we have the most debt we have ever had, tax rises are on their way, pay freezes are already in situ and the price of oil is ever increasing pushing most other things up.....disposable income is only going to go down.
Or did you think people generally bathe in cash for fun?
It will mean the end of wreckless lending though if they can't lend to someone who is paying out 30% of their income on debt payments.0 -
Now people can understand why I said the quality of the bulls on HPC was so poor, jumping on what you perceive to 'the right train' and sticking the finger up at people who you perceive to have missed it is very poor form, at least chucky, Dan, StevieJ... etc have class, hell I would even have a drink and a laugh with them.
On the flip side and having read many of the OP's posts on HPC he's just the sort of person that you wouldn't pi$$ on if they were on fire. If this is the way board is going to end up, with the reject trolls from HPC then it will sink out of sight.0 -
HAMISH_MCTAVISH wrote: »Financial Times
:T:T:T:T
Game on.
That was the last great hope of the bears.
The next booms gonna be huge........
How anyone can cheer at the news that people may be forced into higher and higher debt levels is beyond me.
You are a desparate man Mctwatish.
But all your HPI cheerleading bullsh1t and clinging to false hopes isn't going to get you anywhere.
It's time to wake up and realise that HPI is not going to come to your rescue."The problem with quotes on the internet is that you never know whether they are genuine or not" -
Albert Einstein0 -
HAMISH_MCTAVISH wrote: »Financial Times
:T:T:T:T
Game on.
That was the last great hope of the bears.
The next booms gonna be huge........
Strange no link?
It seems the banks are self correcting to multiples of income anyway. It was all this so called affordability levels that together with the fraud caused the bubble and the credit crunch anyway:exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.
Save our Savers
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“We are also concerned that having a fairly blunt tool like a cap on loan-to-values could have an effect of denying first-time buyers access to the market, which would be unfortunate,”
Whats the problem with this? this to me is just common sense, it says to me you can't obviously afford to buy a house so we won't lend you the money until you can, thus protecting you from your stupid self in getting into debt you will struggle with!
Anyway, placing a cap on LTVs will eventually make houses affordable for EVERYONE!
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“We are also concerned that having a fairly blunt tool like a cap on loan-to-values could have an effect of denying first-time buyers access to the market, which would be unfortunate,”
Whats the problem with this? this to me is just common sense, it says to me you can't obviously afford to buy a house so we won't lend you the money until you can, thus protecting you from your stupid self in getting into debt you will struggle with!
Anyway, placing a cap on LTVs will eventually make houses affordable for EVERYONE!
It's pretty crude to cap things in this way. What about a couple where one half has had a temporary reduction in income or someone who has a secure job where their income is highly likely to rise very quickly, like a doctor for example?
Retail banks should apply risk criteria to their lending and that should be policed by regulators - for example banks who lend to riskier propositions could be required to keep more capital in reserve.0 -
Sounds like a good move - no more 5 times salary for people already maxed out on credit cards and loans. Looks like the FSA are agreeing with current lending policies and won't be rubber-stamping Trooser's orders to get back to 2007 lending levels for a long long time (about bleeding time for a bit of (un)common sense to creep in).0
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Totally agree with ManAtHome.
Initially it might scupper first time buyers like myself however longer term it should stop insane house price growth, prevent dangerous levels of borrowing and housing will eventually become more affordable to future generations - too late for me though unless they can drop another 25-30%.
I live in hope (fingers crossed).0 -
Nope, capping a product's price or availability leads to rationing. Supply falls as housebuilders have less of an incentive to build. While houses may become 'affordable' that doesn't mean they become available and those that are available are likely to be poorer quality (housebuilders having to cut corners to build to a particular price lowered thanks to a cap on LTVs).Anyway, placing a cap on LTVs will eventually make houses affordable for EVERYONE!"The state is the great fiction by which everybody seeks to live at the expense of everybody else." -- Frederic Bastiat, 1848.0
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