Official. No more Liar loans. Celf cert banned.

ruggedtoast

ukcarper wrote: »

how much is 4 years rent in the southeast?

Probably about £35k - £40k on a house, depending on the area.

I guess over an equivalent period you'd pay about £20k interest on the mortgage, plus a £20k loss, minus £10k repaid on the principal squared by the inconvenience of renting divided by the maintenance costs, multiplied by how big of a nob your landlord is, cubed.

So buying probably works out a bit better as long as you didnt need to move.

HAMISH_MCTAVISH

ukcarper wrote: »

how much is 4 years rent in the southeast?

Quite.

For many, perhaps even most, purchasers from 4 years ago the low rates since have more than compensated for the capital loss.

Versus renting the same house since, they'll now mostly have broken even or be in a slight gain.

TruckerT

Self-cert mortgages were based on the assumption by all parties involved (lenders, brokers, borrowers) that the mortgage would at all times be covered by the ever-increasing 'value' of the property, and that it was not necessary to establish the borrower's ability to meet the monthly repayments

But it was the lenders who took the greatest financial risk, and when their gamble failed, they should have been required to take the greatest hit

TruckerT

ruggedtoast

HAMISH_MCTAVISH wrote: »

Quite.

For many, perhaps even most, purchasers from 4 years ago the low rates since have more than compensated for the capital loss.

Versus renting the same house since, they'll now mostly have broken even or be in a slight gain.

I think you should run this by Graham.

geneer

wotsthat wrote: »

Where's the evidence? Sounds like a geneer meme.

I'd expect that arrears rates would be on the increase if significant numbers had been in receipt of loans they couldn't afford.

I rather think you've done my job for me with your ill considered response. :rotfl:

geneer

HAMISH_MCTAVISH wrote: »

I don't think julieq or any other rational person has denied that some people on self cert mortgages exaggerated their income.

But the truth is that as always the bears like to take a tiny problem and inflate it out of all proportion to reality.

As has been noted many times, of all the mortgages issued without "proof" of income, the majority were not self-cert at all but rather fast track, which is an entirely different animal.

For example, when I last got a mortgage, I walked into my bank with all the documentation I thought I'd need, including pay slips. As it turned out, the mortgage advisor looked at the screen and saw all our account details including pay deposits, and approved it on the spot. They never asked for the payslips.

This was a fast track mortgage, and no proof of income was required. It wasn't self cert, but a lot of people on here seem to confuse the two.

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.

But ultimately to see how big a nonsense this whole issue of self-cert is, and how little impact it had on the market, you don't need to look any further than the fact house prices are now just 10% below peak and stable despite the fact these mortgages haven't been issued for almost 2 years now.

Hamish is very much from the neo-con school of debate.
Just stick phrases like "the truth is" throughout the nonsense and bobs your uncle. "Just" 10% down (i.e. same nominal falls as the 90's crash).

Yellow Uranium Hamish? Whatever.

olly300

wotsthat wrote: »

Where's the evidence? Sounds like a geneer meme.

I'd expect that arrears rates would be on the increase if significant numbers had been in receipt of loans they couldn't afford.

Geneer and others obviously haven't met people who have been made unemployed who were on high salaries. They didn't self-cert their mortgages.

There as the people I know who self-certed, due to the nature of their work, made every effort including working away from home to ensure they could pay their mortgage.

wotsthat

geneer wrote: »

I rather think you've done my job for me with your ill considered response. :rotfl:

Geneer translation - I can't back up my assertion that self cert led to an increase in loans that people couldn't afford.

geneer

wotsthat wrote: »

Geneer translation - I can't back up my assertion that self cert led to an increase in loans that people couldn't afford.

Actually wotsits, I was pointing out that your response was so woefully devoid of reality that it wasn't even worth pointing out the the obvious enormity of your ignorance.

wotsthat

geneer wrote: »

Actually wotsits, I was pointing out that your response was so woefully devoid of reality that it wasn't even worth pointing out the the obvious enormity of your ignorance.

Geneer translation - I really really can't back up my assertion that self cert led to an increase in loans that people couldn't afford.