Skipton BS faces Legal Challenge over raising rates...

chucky

DaddyBear wrote: »

So subprime mortgages and the fact that banks had insufficent deposits relative to the amount in loans had nothing to do with it?

that could be right if you are talking about the US of A

can't you see that the insufficient deposit issue relative to loans is a liquidity issue and not the types of loans they offered. it could happen with 50% LTV mortgages if you're not funded correctly.

HAMISH_MCTAVISH

chucky wrote: »

wow that's 0.95% of mortgages out there

Indeed.

Graham is showing his mastery of English again.

"It wasn't miniscule, it was 0.4% PLUS 0.95%.....":rotfl:

Oh dear....

HAMISH_MCTAVISH

Charterhouse wrote: »

Are you seriously saying that the fact that people would choose to go back and do it differently now they know how things panned out means that buying on a 100% overlevered mortgage was the right choice? .

The facts are indisputable. Buying in 2003 on a 100% mortgage would have been by far the better choice.

And if you're so against 100% mortgages, you may want to take it up with the personal finance editor of the Telegraph, as per todays thread on the topic.....

chucky

HAMISH_MCTAVISH wrote: »

The facts are indisputable. Buying in 2003 on a 100% mortgage would have been by far the better choice.

And if you're so against 100% mortgages, you may want to take it up with the personal finance editor of the Telegraph, as per todays thread on the topic.....

to be fair Hamish - in many cases yes but doesn't that depend on your mortgage rate too

were 100% mortgages not more expensive and had that stupid mortgage indemnity insurance attached to them?

Kohoutek

chucky wrote: »

Northern Rock's collapse had nothing to do with 100% or 125% mortgages - it was due to them not being able to get the required liquidity on the money markets. it could have happened if they had customers with 50% mortgages, it was their liquidity model that was flawed not their lending policy

And what caused the lack of liquidity on the money markets? Answer: the collapse of the subprime mortgage market in the US. Doesn't that demonstrate in principle that risky mortgage lending is risky for the economy?

Do you know where Northern Rock's risky mortgages went? Just look on their website:

http://companyinfo.northernrock.co.uk/investorRelations/results/stockEx061002.asp

"Northern rock plc: trading statement for the 9 months to 30 september 2006

We are continuing to develop our partnership with Lehman Brothers to offer near-prime, sub-prime and self certified loans to customers. The credit risk on these loans will not be borne by Northern Rock..."

100%+ mortgages are predicated on the assumption that property prices will never fall. That's complete rubbish, just look at the facts:

CharlieBilly

They cant be doing to badly they bought SBS

mystic_trev wrote: »

Basically the Skipton are 'damned if the do and damned if they don't' If they can't envoke the 'exceptional circumstances' they and many other BS's will go out of business. Not a very good way to increase lending.

Graham_Devon

chucky wrote: »

wow that's 0.95% of mortgages out there

Possibly. Which would mean the biggest number ever, while we are at the lowest rates ever, with the biggest stimulus ever.

And remember, that 0.95% of the mortgage market is made up of those who actually went to court.

So if 1% of the mortgage market in 1 year got to court re: reposession, just think of the numbers in arrears and struggling.

Charterhouse

HAMISH_MCTAVISH wrote: »

The facts are indisputable. Buying in 2003 on a 100% mortgage would have been by far the better choice.

And if you're so against 100% mortgages, you may want to take it up with the personal finance editor of the Telegraph, as per todays thread on the topic.....

There is a difference between a choice ex-post and ex-ante. Ex-ante is what is relevant here. We don't have a time machine so saying that X was the best thing to do ex-post is completely meaningless. Ex-post there is no risk. Ex-ante there is lots of risk and depending on your forward views and anticipated volatilities for house prices and interest rates it might have been the wrong risk adjusted choice (and quite possibly was if you didn't have a large deposit).

You either like to argue about a lot of things that you have a poor grasp of, or, as I suggest above, you have a perfect grasp of them and are just trolling.

DaddyBear

Kohoutek wrote: »

And what caused the lack of liquidity on the money markets? Answer: the collapse of the subprime mortgage market in the US. Doesn't that demonstrate in principle that risky mortgage lending is risky for the economy?

Don't point out the obvious to the bulls. HPI is good and anyone who demonstrates that it isn't is either stupid or a VI.

DaddyBear

HAMISH_MCTAVISH wrote: »

The facts are indisputable. Buying in 2003 on a 100% mortgage would have been by far the better choice.

Once again Hamish, you are missing the point.

If the poster had a crystal ball in 2003 then of course he would have bought with a 100% mortgage.
He made a sensible choice at the time. Unfortunately due to the recklessness of the majority this didn't pan out for him.