Self-cert " made up nearly half of all the mortgages offered at the peak of the boom"

carolt

chucknorris wrote: »

No they are talking about the entire mortgage market not just their own loans.

Think about what you are saying Carol, are you really proposing that there were enough self certified sub prime loans that would change that 23% of the rpime market to nearly 50% of the entire market?

That is even more unbelievable than the basic percentage itself when you consider sub prime loans are probably a much smaller end of the market. Yet you claim it changes the entire market figure to nearly 50% from 23%!

See Mr Mumble's post, and my reply to it. Happy to accept if it was not the case - don't think it makes any difference in practice, as both types have now been banned.

Thrugelmir

Self cert mortgages now account for a little over 10% of the UK residential mortgage market. Or around a million mortgages.

Whilst some people can provide proof of income the majority are unable to do so.

If the new rules come into effect a lot of people will be trapped and unable to remortgage.

chucknorris

The_White_Horse wrote: »

of course it is true. how else would run of the mill houses in London be worth 300-400k? the avearge salary is about 30k. says it all really.

i am surprised it is as low as 50%!!!

Too late it has been refuted the BBC were wrong

JonnyBravo

carolt wrote: »

Excellent news for sanity - here's to no future booms and busts. :beer:

I agree it will help sanity but it really won't end boom and bust.
It is human nature that drives boom and bust. It will happen again.

People, or rather some people, want to have an "advantage" over their colleague/friend/fellow countrymen and that is enough to ensure it will happen. There will be some new angle to exploit and a new bubble will form.

chucknorris

JonnyBravo wrote: »

I agree it will help sanity but it really won't end boom and bust.
It is human nature that drives boom and bust. It will happen again.

People, or rather some people, want to have an "advantage" over their colleague/friend/fellow countrymen and that is enough to ensure it will happen. There will be some new angle to exploit and a new bubble will form.

I fully agree with you there (eventually of course, not for quite a while yet)

kennyboy66_2

self certified and non-verified are two different things.

Many peak mortgages are now being considered as self cert, purely because the lender did not check the P60 / pay slips etc.

In "Ye Olde Days", lenders not only checked payslips but rang or wrote to employers for confirmation.

sjaypink

Suprised to hear on radio news today the mini- interviews (you know the type: they've just stuck a microphone in the faces of random people in the street kind of thing?). Everyone was really peed off saying 'well, thats it now. Its been hard enough to get a mortgage recently as it is, this is a further nightmare for FTB' etc, etc, etc

Of course perhaps the interviews were selected to give that negative slant... but still shocked that so many people have been reliant on self-cert. Thought it was a pretty small % TBH

Wookster

Thrugelmir wrote: »

Whilst some people can provide proof of income the majority are unable to do so.

What?? Most people have contracts of employment/ P60s/ tax returns/ company accounts etc.

This shouldn't be a big problem for people - maybe they'll have to wait a bit longer to get their mortgage so they have a track record of incomes but prudence isn't a bad thing.

What I think will be a real issue is how many people have been dodging tax and how this affects their ability to keep doing so in the future.

Gorgeous_George

Spot on Wookster.

Some self-employed people will struggle to remortgage without declaring their income to the taxman. Many businesses that accept cash can find ways to hide a percentage from the taxman. But this makes it difficult for them to prove their income for mortgage purposes.

I pay tax and so should everybody else.

GG

HAMISH_MCTAVISH

Mr_Mumble wrote: »

Yup, from the FSA report (page 48):

by the time the mortgage market reached its height in 2006/07, 45% of all
mortgages were advanced on a NIV [Non-income verified] basis.
...

There seems to be a lot of confusion between loan categories today.

Fast Tracked mortgages are entirely different to Self Cert.

Yet both are counted as Non Income Verified.

The fact that the lender chose not to verify income because the person had a great credit record or was applying for a very small LTV (which is basically what fast track is), has nothing whatsoever to do with "Liar Loans".

It is difficult to analyse arrears rates separately for self-cert
mortgages, as many statistics capture both self-cert and fast tracked mortgages in the
same category.

Which is precisely why it is impossible to state that half of all mortgages were self cert. They blatantly were not.