Mansfield Offers 100% mortgage

Crash_Over

http://www.ft.com/cms/s/0/4a7b4800-a6cf-11de-bd14-00144feabdc0.html

Mansfield Building Society, a Nottinghamshire lender with 25,000 depositors, has begun offering a 100 per cent mortgage to first-time homeowners buying in partnership with a housing association.

The mortgage is the first to cover the full value of borrowings by new homeowners since Abbey withdrew its last 100 per cent product 18 months ago. It is a sign of increasing efforts to get first-time buyers to enter the housing market.

Nationwide announced a 125% Mortgage in July to allow homeowners in negative equity to move, but that still required a deposit worth 5 per cent of the new property.

The mortgage being offered by the Mansfield will be offered only to customers purchasing part-ownership properties from South Yorkshire Housing Association, a Sheffield-based social housing provider.

"Giving people the opportunity to own their own homes is fundamental to being a building society, but many people can't get on the ladder at the moment," said Nigel Quinton, Mansfield's chief executive.

Ray Boulger, senior technical manager of John Charcol, the mortgage broker, said that the loan would outstrip 95 per cent shared-ownership products being offered by Yorkshire Bank and Clydesdale Bank.

:j

mewbie_2

How long before the headlines read "Mansfield goes bust"

Graham_Devon

What a stupid article.

They can offer 100% on Shared Ownership as they cannot reposess the home anyway, it belongs to the shared ownership company, who have an insurance against the tennant defaulting and will therefore buy the share back from the mortgage company.

This is hardly helping all first time buyers, neither is it a sign of the times, neither is it 100% mortgages coming back, neither is it jumpy icon man worthy, unless you are a bit exciteable at the sniff of HPI.

Crash_Over

Graham_Devon wrote: »

What a stupid article.

They can offer 100% on Shared Ownership as they cannot reposess the home anyway, it belongs to the shared ownership company, who have an insurance against the tennant defaulting and will therefore buy the share back from the mortgage company.

This is hardly helping all first time buyers, neither is it a sign of the times, neither is it 100% mortgages coming back, neither is it jumpy icon man worthy, unless you are a bit exciteable at the sniff of HPI.

100% mortgages and the return of the RMBS market ~ both on the same day.

It's merely a coincidence.

Isn't it?

Graham_Devon

Crash_Over wrote: »

100% mortgages and the return of the RMBS market ~ both on the same day.

It's merely a coincidence.

Isn't it?

100% mortgage. Not mortgages.

Limited to a single partnership with a single shared ownership company desperate to sell a new build flat.

Yes, coincidence.

Thrugelmir

Crash_Over wrote: »

100% mortgages and the return of the RMBS market ~ both on the same day.

It's merely a coincidence.

Isn't it?

Only LloydsHBOS though, two tranches one of £1.5 billion and one of £1.25 billion. Seeing as they have a funding gap of around £225 billion. in their balance sheet. Small change in the scheme of things.

before_hollywood

surely the last few years have taught us no 100% mortgages are a good idea?

Cleaver

before_hollywood wrote: »

surely the last few years have taught us no 100% mortgages are a good idea?

Well, as no lenders (by that I mean real lenders to real people for real places) are currently offering 100% mortgages you could summise that there have been lessons learned.

I don't think this is the case though. As soon as financial institutions think they can make money again with a 100% mortgage products they will be available again, providing there isn't legislation against them (which, let's face it, isn't likely).

Any mortgage with less than a 90% LTV is a bit daft for an average person really, isn't it?

Thrugelmir

A borrower can only obtain a mortgage for a 100% for the share of property which they are buying, ie 60%. The other 40% is rented to the borrower.

So this not , repeat not, a 100% mortgage in terms of LTV.

dopester

This is no surprise move by Mansfield Building Society.

Many of the building societies are desperate to lend - their business model relies on it. They are yearning for credit-worthy people to lend to.

From this time last year.. but important.

Building societies are in a different boat from banks. They must rely on savers' funds to provide at least 50% of their lending, and have not been hit as hard by the disappearance of wholesale funds on the financial markets.

Unlike some banks they have not been forced to withdraw almost entirely from new lending.

Open for business

The BBC contacted a selection of big, medium and small building societies.

"We are doing hundreds of mortgages each week, we are still actively lending," she says. "But things have got a lot quieter in the last few weeks.

"People are holding back because house prices are falling, especially first-time buyers."

Peter Craigie, operations director of the 34-branch Dunfermline building society echoes that view. "We haven't shut up shop and we are certainly open for business."

"Our lending has been very buoyant until very recently, though the indications are that the market is quietening down significantly," he says.

He acknowledges that if borrowers dwindled further then to balance the society's inflow and outflow of cash, savers rates might have to be cut.

Slump ahead

With no sign of the slump coming to an end, there is a distinct possibility in the coming months that lending to home buyers - as opposed to people remortgaging by just swapping lenders - may fall by 80% or even 90% by the end of the year.

On the face of it this should pose a problem for the UK's building societies.

Their reason to exist is to lend to house buyers.

So what would happen if that side of their business really did dry up?

That possibility seems likeliest at our smallest societies, some of which would normally lend fewer than 15 mortgages a week anyway.

Might applicants disappear altogether?
"It might possibly happen," he says.
"Credit worthy customers are not knocking on our door.
"It wouldn't matter at all in the short term, one to three months, but we are all concerned. We have to lend money to pay out premium savings and maintain liquidity levels."

http://news.bbc.co.uk/1/hi/business/7556220.stm

Cat695

Thrugelmir wrote: »

A borrower can only obtain a mortgage for a 100% for the share of property which they are buying, ie 60%. The other 40% is rented to the borrower.

So this not , repeat not, a 100% mortgage in terms of LTV.

SO a useless thread.....Jesus people make up anything to sell their house