Official. No more Liar loans. Celf cert banned.

geneer

wotsthat wrote: »

It's a special code to let everyone know that he won't be refuting Conrad's claims with anything that looks like supporting evidence.

The claims that Conrad hasn't supported with any supporting evidence you mean. :rotfl:

geneer

Conrad wrote: »

Again, can you prove our mortgage market is anything other than ordered?

What does that even mean Conrad?

Conrad wrote: »

Please include reference to repossession trends over the last 20 years.

Sorry to tell you but the old rules of context and analysis apply.

You know what you can do with your "repossessions mate"
The banks are bending over backwards to stop the whole shebang unravelling further.
Which is not exactly the same as "ordered".

Like I said, you want to watch what your shoveling.
Theres a limit to how much your clients will be willing to stomach.

geneer

RenovationMan wrote: »

What on earth is a "bovine drolling monkets"?

An unfortunate series of typo's.
But you go to town. :rotfl: Jeesh.

RenovationMan wrote: »

I often think the level of some of geneers posts points towards a call centre drone firing off posts ASAP before his supervisor looks over his shoulder. RBS have a call centre in Edinburgh, do they not?

I often think you're just not committed to this Ignoring.

Cleaver

Graham_Devon wrote: »

Thats a massive difference. Interest only gave you another £55,000 of affordability. I believe more than 50% were choosing the interest only route...and it's no real surprise, given how much more you could get for the same monthly budget.

There's a few sources for how many mortgages were interest only in 2007, but they all seem to around 30% and this was the peak. IO rose from around 6% in 2002 steadily up to this point.

So I would hazard a guess that of those that have taken out mortgages in the past ten years maybe 1 in 10 are interest only as we currently stand. I would hazard another guess that all of the IO mortgage holders you have some who are perfectly fine and sensible, those that are completely f*cked and everything in between.

Interesting to see that endowment interest only mortgages in the 1990s made up 60% of the market and were still 30% of the market in 2000.

Lastly, we were one of the couples who took out an interest only mortgage in 2006 with The One Account. Worked out really well for us as we were repaying around a thousand over the repayment amount advised every month. But I guess we show up on the stats as an IO mortgage. I fully understand that for every one of us there was someone chancing their arm and buying a house they had no way of affording. Overall I agree with Graham that IO mortgages are bad news, but I don't think it's quite the major issue it's sometimes played out to be. People will find a way to afford their home somehow.

Endowment mortgages were taking 64 percent of the new mortgage market by 1993. However, by 2000 the number of endowment mortgages sold annually had halved and by 2003 the bubble had burst. Large numbers of endowment policies, both 'with profits' and 'unit linked', were no longer valuable enough to pay off their associated mortgage loans.

http://www.fancyamortgage.co.uk/EndowmentMortgages/Background.asp

Since 2007, there has been a clear shift away from interest-only mortgages, in particular for first-time buyers. In December only 6% of first-time buyer loans were interest only, compared with pre-2007 when around 30% of all mortgages to first-time buyers were interest only.

http://www.cml.org.uk/cml/media/press/2838



http://blogs.thisismoney.co.uk/this_is_money_blog/2009/10/the-interestonly-mortgage-timebomb.html

sarkin1

Conrad wrote: »

Again, can you prove our mortgage market is anything other than ordered?

Please include reference to repossession trends over the last 20 years.

http://www.moneymarketing.co.uk/fsa-up-to-8-of-mortgages-subject-to-forbearance/1042617.article

HAMISH_MCTAVISH

sarkin1 wrote: »

http://www.moneymarketing.co.uk/fsa-up-to-8-of-mortgages-subject-to-forbearance/1042617.article

From your link.....

"That suggests that, in the absence of forbearance, the mortgage arrears rate might have been 0.5 percentage points higher at 1.7 per cent .”

Seems a journalist may have misinterpreted the report when they wrote the headline....;)

Arrears of 1.7% if no forbearance was shown instead of the current 1.2% doesn't seem like a disorderly market to me. Still, if you're desperate to clutch at straws, go right ahead.

property.advert

Nothing wrong with self cert mortgages then or now, only not for 100% of other such lunatic valuations. For LTVs at up to perhaps 70/75%, they are fine in a multitude of circumstances.

brit1234

HAMISH_MCTAVISH wrote: »

Radio 4 are wrong.

They have included the fast-track figures in that.

Hamish Fast track is self cert. :rotfl:

Open your eyes and don't fall for the re branding.

wotsthat

brit1234 wrote: »

Hamish Fast track is self cert. :rotfl:

Open your eyes and don't fall for the re branding.

No it's not.

Fast track means just that. People with high credit scores get moved along more quickly and without as many stringent checks. It doesn't mean that they are self certifying their incomes or being dishonest.

If you get fast tracked you don't know until after the application starts so if you decide to lie about income you do it knowing that it's by no means certain that you'll get away with it.

DervProf

HAMISH_MCTAVISH wrote: »

And of the minority of loans issued without proof of income that were actually self-cert, a large percentage would have been to those on contract work, the self employed, or those who don't fit traditional lending criteria, for example commission based pay structures.

Those people are now locked out of the market, but as is demonstrably the case, they have not defaulted in large numbers not proved to be a risk to lenders, and indeed the FSA acknowledges this by exempting existing customers from the rules.

I wonder if the low number of defaults has anything to do with the lowest interest rates on record, or that banks are probably taking a more relaxed view on those who fall into arrears ?

If "loose lending" had continued, I suspect that the number of self cert and other "special" mortgage products would now be more widely used than ever. House prices would have continued their upward trajectory, and the banks/lenders would be in a very precarious situation.

Short term thinking (like wanting HPI, fuelled by creative mortgage products) is all well and good, but it is almost guaranteed to end in big financial problems. I admit that it seems bad news that lending resrictions are being introduced at this moment in time, but it doesn't suprise me that the gate is being shut after the horse is nowhere to be seen. This should have been done ~2004, but people where too busy enjoying a property boom that would never end.