Mortgage lenders call for restrictions on lending to be watered down.

A._Badger

That would be the same FSA that has had such an illustrious past record, would it?

Personally, I think julieq has made an excellent point. A lot of people are scrambling onto a convenient bandwagon here. The problem began with US mortgages and much of that stemmed from politicians getting their grubby fingers in the machinery. The last thing we need is more meddling from amateurs playing to the gallery.

ukcarper

Graham_Devon wrote: »

What about this then?

Is this all to do with the US too?



I think it's fair to say the above could be quite a serious issue, and nothing to do with the US.

On a personal level, I don't expect all these proposals to go through in full.

BUT, at least it's now being talked about, and people are being made to look into it.

As above, we do have our own problems, and we can't keep looking to blame the US for them. 46% of UK households having little or no money left after mortgage and bill payments, with average mortgage rates as low as they are, needs looking into, and hopefully, we can prevent this in the future.

How did they come up with that figure (46%)

michaels

Julie I don't want to disagree as I do mostly agree but - but Northern Rock? I believe it turns out they were insolvent not just illiquid.

When house prices were at their 2009 trough a lot of borrowers were in negative equity and without govt support their would have been more defaults hence the huge provisions needed and the current capital requirements.

Seems to me the banks are well enough capitalised to cope with more defaults at current prices or the current level of defaults if prices fall but both simultaneously would be a problem I suspect.

Loughton_Monkey

It's absolutely certain that mortgage lending needed tightening up. But there is a danger of screwing it too tightly. The requirement for 25% deposit, for example, is relatively 'draconian' since a fall of anything like 25% from current (relatively low) values is ludicrous to contemplate. [Especially with the tendancy - presumably rife at the moment - for valuers to came in at far below what is being paid].

So, OK, leave it at 25%, but then have 'reasonable' flexibility on income levels - but far from the stupid non-checked lies of the past. But preferably keep the 'affordability' fairly tight but relax up to 20% or 15% deposit. A well worded, signed, and clear statment making absolutely sure that the mortgagor understands perfectly the committment (s)he is entering, coupled with robust arreas procedures should be safe enough.

mbga9pgf

"Nazis ask for more effective Zyclon B"

Nothing in the FSA's requirements is not done elsewhere, in fact France, acountry with similar lending criteria, has had stable HPI coupled to wages for a long time.

Sorry, but we need to kill the beast.

The FSA can kill boom and bust. Its not going to be easy though. I saved a 30% deposit. I am sure others can too.

By the way, the "assumptions" above do not prevent >25 year terms. however, when calculating the mortgage, the affordability level has to be assessed at the 25 year mark.

Same with IO. To make sure we are comparing eggs with eggs, an IO customer has to meet capital repayment affordability criteria on the same loan.

If you havent seen it, Halifax did a PDF assessing the different affordability levels.

It was based upon a % of post tax disposable income that went on the total mortgage payment.

Over 35% is considered unaffordable.

One thing that concerns me is there is no calculation it seems that accounts for excessive CC debt.

Scarily, Halifax (I think it was halifax anyway) only considered a 2% rise in base when assessing affordability. Nuts.

StevieJ

mcc100 wrote: »

Basically to implement measures that were in place 20 odd years ago when I took out my first mortgage.

If only they had stayed in place in the years leading up to 2007 then the housing market would not be in such a precarious state as it is now.

But it was in a precarious state 20 years ago

StevieJ

Graham_Devon wrote: »

What about this then?

Is this all to do with the US too?



As above, we do have our own problems, and we can't keep looking to blame the US for them. 46% of UK households having little or no money left after mortgage and bill payments, with average mortgage rates as low as they are, needs looking into, and hopefully, we can prevent this in the future.

"Almost half of UK households (46%) have had little or no money left after their mortgage and other bills were deducted from their income," the FSA said.

"Even a modest rise in interest rates could lead to a significant increase in the number of families suffering financial distress.

Just out of interest how do they know all that about personal finances?

doire_2

CML having another moan boo hoo

Meanwhile in other news turkeys call for an end to christmas

StevieJ

Loughton_Monkey wrote: »

It's absolutely certain that mortgage lending needed tightening up. But there is a danger of screwing it too tightly. The requirement for 25% deposit, for example, is relatively 'draconian' since a fall of anything like 25% from current (relatively low) values is ludicrous to contemplate. [Especially with the tendancy - presumably rife at the moment - for valuers to came in at far below what is being paid].

So, OK, leave it at 25%, but then have 'reasonable' flexibility on income levels - but far from the stupid non-checked lies of the past. But preferably keep the 'affordability' fairly tight but relax up to 20% or 15% deposit. A well worded, signed, and clear statment making absolutely sure that the mortgagor understands perfectly the committment (s)he is entering, coupled with robust arreas procedures should be safe enough.

A 10% deposit always seemed the sensible option to me, it is generally enough to signify that the person/couple has some control over their finances but is not too onerous (although there is always BOMAD, nothing is perfect). It does seem that when govt agencies stick their oar in we move from one extreme to another.

StevieJ

mbga9pgf wrote: »

"Nazis ask for more effective Zyclon B"

Nothing in the FSA's requirements is not done elsewhere, in fact France, acountry with similar lending criteria, has had stable HPI coupled to wages for a long time.

Sorry, but we need to kill the beast.

The FSA can kill boom and bus t. Its not going to be easy though. I saved a 30% deposit. I am sure others can too.
.

Mmmmm, where have I heard that before 'I saved a 30% deposit' Ya, Ya, de Yah Yah.