UK Government to Underwrite New Mortgage Lending

heathcote123

Pimperne1 wrote: »

Anyway just in case it has not been posted here is the Express article:

http://www.express.co.uk/posts/view/284264/Boost-for-first-time-home-buyers

What surprises me with the HPCers is that they started off saying they were looking after the interests of First Time Buyers. Here we have the Government, arguably, providing some support for First Time Buyers and they are going bersequack about it. (Only joking, it doesn't surprise me, what they meant when they said they were looking after the FTBs is that they generally had sold and wanted the market to plummet to allow them to jump back on at a preferential rate).

Excellent stuff, do you think we can use this to fund a btl?

HAMISH_MCTAVISH

Thrugelmir wrote: »

Banks are required to hold far higher levels of capital to fund high LTV mortgages. So commercially it makes little sense for them to lend huge sums in this sector of the market.

However if the government underwrote the risk through a MIG or similar, this would radically change the equation as it would eliminate the extra capital need..

If it was done right, (and given that it's politicians doing it, I have my doubts still) then effectively, mortgage funding in the UK would be backed by the AAA rating of the UK government.

And wholesale lenders could pick up better returns on UK Govt backed AAA MBS than on UK govt AAA Gilts!!!

The floodgates would open for mortgage funding, and the cost to the govt would be virtually zero, perhaps a quarter of a percent of total lending under the scheme at most.

The housing market would unlock, construction would ramp up again, employment would increase, benefits bills would reduce, house prices would stabilise or start increasing, the "wealth effect" would kick in with regards to consumer spending, and the wider economy would start a meaningful recovery in time for the next election.

It's absolute genius.

But only if, and it's a big IF, it's done right. ie, on a massive scale.

If it's just another pathetic token gesture like the interventions to date, it'll have little effect.

ess0two

Dan: wrote: »

Check out this topic on HPC http://www.housepricecrash.co.uk/forum/index.php?showtopic=171854&st=0

Nothing gives me greater plessure then the losers on this website in despair!

Some bitter whines of despair in that link.

Percy1983

HAMISH_MCTAVISH wrote: »

and the housing crisis won't be fixed until lenders start lending at historically normal, prudent and sensible levels again

Thats what is happening right now... isn't it.

PS I have just been accepted for a 90% mortgage, you know those things that don't exist...

chewmylegoff

HAMISH_MCTAVISH wrote: »

UK Govt backed AAA MBS than on UK govt AAA Gilts!!!

supposedly AAA-rated mortgage backed securities.

they sound familiar? have they been at the heart of any global financial meltdowns recently, or anything like that?

Turnbull2000

ess0two wrote: »

Some bitter whines of despair in that link.

Yet many will still cling to their crash delusion :rotfl:

The mortgage rescue schemes and ultra low rates have done the groundwork. Now this could finally be the government intervention that gets transactions and values moving swiftly upwards. This will be politically popular amongst both the young (who get on the ladder) and old (who get rising values)

HAMISH_MCTAVISH

Percy1983 wrote: »

Thats what is happening right now... isn't it.

Nope.

PS I have just been accepted for a 90% mortgage, you know those things that don't exist...

Let me know when the funds are actually issued. An AIP means nothing.;)

But seriously, they do exist. It's just that somewhere around 90% of applicants for them are rejected during the process at some point.

So congrats on clearing the first hurdle. But there's many more to come, and if you do get it, you're in the lucky 10%, not the typical applicant.

HAMISH_MCTAVISH

chewmylegoff wrote: »

supposedly AAA-rated mortgage backed securities.

If it's underwritten by a AAA rated govt, there's nothing "supposedly" about it. It's genuinely AAA.

they sound familiar? have they been at the heart of any global financial meltdowns recently, or anything like that?

Well actually it was the near-fraudulent inclusion of sub prime mortgages in AAA rated MBS that caused the problem.

But are you really trying to claim it's impossible to create a low risk MBS that does what it says on the tin and doesn't include a big wad of sub prime slime???

Seriously? You really believe that's outwith the power of mankind to do?

We can put men on the moon, we can split the atom, we can sequence a human genome, but we can't figure out how to put the right label on prime mortgages and the right label on sub prime mortgages....

Just..... Wow.

grizzly1911

HAMISH_MCTAVISH wrote: »

If it's underwritten by a AAA rated govt, there's nothing "supposedly" about it. It's genuinely AAA.



Well actually it was the near-fraudulent inclusion of sub prime mortgages in AAA rated MBS that caused the problem.

Well how about that then, I guess it must just have been a mistake, perhaps a clerk just happened to hit the enter key at the wrong time.

But are you really trying to claim it's impossible to create a low risk MBS that does what it says on the tin and doesn't include a big wad of sub prime slime???

Seriously? You really believe that's outwith the power of mankind to do?

Not impossible but when money is a stake, greed takes over, these things happen. Bit like money laundering keep on shuffling it and repackaging it for long enough may be no will catch you.

We can put men on the moon, we can split the atom, we can sequence a human genome, but we can't figure out how to put the right label on prime mortgages and the right label on sub prime mortgages....

Difference is the guys that do those sort of things probably have some morals an ethics.

Jack_Johnson_the_acorn

HAMISH_MCTAVISH wrote: »

Nope.



Let me know when the funds are actually issued. An AIP means nothing.;)

But seriously, they do exist. It's just that somewhere around 90% of applicants for them are rejected during the process at some point.

So congrats on clearing the first hurdle. But there's many more to come, and if you do get it, you're in the lucky 10%, not the typical applicant.

I've had my Mortgage offer from Natwest 10% deposit:T, Initially rejected by HSBC.... Even though we where only asking for 2x are combined income and both with perfect credit history....