FSA backs down on tough lending rules

julieq

Derv definitely isn't Geneer, RM, he (I assume he) argues robustly but thoughtfully, and a decent bloke in my opinion even if on the other side of the argument to me. Geneer is just a bit of a nutjob sadly.

neverdespairgirl

DervProf wrote: »

Most of the people I know that have mortages got them from a high street lender. I suspect that those who can't quite borrow enough directly from a lender will use a broker. I'm not suggesting that all brokers are "bent", but I suspect a fair few are living "on the edge".

Quite a lot of people in my line of work do use brokers for their mortgages. They tend to know which lenders are fussier about the self-employed, which restrict income multiples for them, how average s/e income is assessed, etc. That can all save a fair bit of time wasting.

DervProf

julieq wrote: »

Derv definitely isn't Geneer, RM, he (I assume he) argues robustly but thoughtfully, and a decent bloke in my opinion even if on the other side of the argument to me. Geneer is just a bit of a nutjob sadly.

Thank you.

I see RenoMan has thanked this post, so maybe he now realises the truth. He's now put me on ignore, stating "I'm not into all the nit picking and pedantry". In other words, he's fed up with being proved or shown to be wrong. And if anyone thinks that I was "nit picking", RenoMan advised me that there were hundreds of inflation proof savings products around (with protected capital). I was genuinely interested in these products, but questioned his statement about there being "hundreds". He claimed he had a product which returned him 50%. I asked him what this product was, and he named an investment fund, which turned out not to return 50%. He then told me that he had made a mistake, and it was a range of funds that he was invested in. I then stated that these funds were risky, and capital isn't protected.

Now, maybe it might seem that I was "nit picking". The fact is I could clearly see that his claims were almost certainly untrue. I am not a stickler for 100% accuracy, but when someone states something along the lines of "You can get a savings account that pays 8%" or "There's a fixed rate mortgage at 1.4% over 5 years", then I think it's fair enough that the claim should be substantiated, not just to prove a point (or not), but it may well be valuable information to others.

If I post something here and someone refutes my statement, then I'll check to see if my statement is accurate. If it is not, I`ll correct my mistake, or admit I was wrong. I am certainly decent and honest enough to do so, and it saves a lot of bickering and never ending arguments.

And thanks to julieq for her comments. Your assumption about my gender is correct, BTW. I do think about what I argue about. I admit that I may argue about the more general gist of the topics, rather than some of the finer, more factual points, but I do argue what I believe in and try to keep it reasonably polite. And I will thank any post that I agree with, no matter who the author is.

geneer

As far as interest only goes, I suspect the banks themselves will ensure that suitable repayment mechanisms are in place.

That aside, this article appears to be focusing on one point in a raft of measures.
Not quite a climb down yet I suspect.

Shapps will need to tread a fine line with this one. A chunk of the public may still be enamoured with the magic HPI machine.
But a larger chunk is more concern about the effects on the economy.
If the FSA doesn't rein the banks in, in might not take much to spark of the resentment and anger which has, to date, remained bubbling under.

Jimmy_31

Conrad wrote: »

Proove it. Tell me in which general locale a reasonably priced property cannot be purchased by a FTB.

Im an FTB who can afford a property in the area i live in but choose not to because the prices are still way too high, i dont want the banks to start throwing money at me or anyone else again because this will keep house prices high. A bank should not be allowed to lend somebody more than 3x their wage, when they are allowed to do this house prices sky rocket which for an average working person is not a good thing.

The FTBs i know dont want the bank to lend them massive amounts of money they want the exact opposite so then they can pay a fair price for a home.

So there you have it, yes a lot of FTBs can buy a home but the ones who are choosing not to are the ones who know the value of money in my opinion.

StevieJ

I think you have hit the right target with your email Conrad, here is the Redwood view on mortgage regulation.

I am fed up with Labour’s pathetic attempts to play politics with the issue of the banking crisis. They want to suggest I was wrong and made the problem worse by saying the mortgage regulation Labour brought in should be scrapped. Their extra regulation clearly did not work. Never have mortgages been so regulated and never have we been in such a mess ..

http://www.johnredwoodsdiary.com/2008/09/28/labour-try-silly-briefing-about-the-mortgage-problems/

Thrugelmir

StevieJ wrote: »

I think you have hit the right target with your email Conrad, here is the Redwood view on mortgage regulation.

One thing to over regulate mortgages another not to regulate properly the entire UK banking system.

Loughton_Monkey

Of course one of the mistakes is in trying to 'regulate mortgages'. To me, that's a bit like trying to regulate the waiters in a restaurant. Yes. They are the main parts of the 'product' you see, but there is a lot more to it behind the scenes.

Behind a mortgage, you have the supply of money to fund it. You have mortgage brokers who maybe are flogging you dodgy associated products. Behind the scenes you have the 'clever' back-room boys 'securitising' your mortgage and selling them on for large commissions. Others buy them, add a few of their own, take their own commission, and sell them on again, and then you buy a bit of them in your ISA - ironically the vehicle you chose to pay back your mortgage!

So you either regulate the whole shooting match [which sadly is what FSA try to do with miserable success] or you perhaps break it up into parts - into parts that are maybe capable of rational regulation on their own. I'm all for breaking banks down (as has been suggested). Retail deposit taking and lending [i.e. the traditional Building Society model] is a rational and profitable business, and capable of regulating - provided it is not manipulated by other arms of the bank.

chucky

Loughton_Monkey wrote: »

Behind a mortgage, you have the supply of money to fund it. You have mortgage brokers who maybe are flogging you dodgy associated products. Behind the scenes you have the 'clever' back-room boys 'securitising' your mortgage and selling them on for large commissions. Others buy them, add a few of their own, take their own commission, and sell them on again, and then you buy a bit of them in your ISA - ironically the vehicle you chose to pay back your mortgage!

where can you buy a CDO, Collaterised Debt or even a CDO Squared on an ISA?

DervProf

chucky wrote: »

where can you buy a CDO, Collaterised Debt or even a CDO Squared on an ISA?

https://www.rightmove.co.uk