Official. No more Liar loans. Celf cert banned.

PaulF81

No more self-cert. Great.

Next moves hopefully re-enacting Glass-Steagall on seperation of retail and investment.

Oh, once the government legislate against too big to fail (hinted about this morning on the andrew marr show by Vince), we might be on firm enough legislative grounds as to prevent a property price bubble in the future.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8963549/Bank-split-plans-will-hit-growth.html

ruggedtoast

Sometimes, when I log onto this forum and read these threads, I feel as though I am an intellectual giant surrounded by mental pygmies.

A._Badger

ruggedtoast wrote: »

Sometimes, when I log onto this forum and read these threads, I feel as though I am an intellectual giant surrounded by mental pygmies.

Don't worry, Toasty: with modern medication and skilled professional treatment these feelings can often be overcome.

brit1234

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.

Radio 4 (Today Program) just now stated 50% of mortgages and the peak of the bubble in 2008 were self certs. Hamish I am sure it was all self employed people buying then and not ordinary workers priced out of the market fibbing on wages.

HAMISH_MCTAVISH

brit1234 wrote: »

Radio 4 (Today Program) just now stated 50% of mortgages and the peak of the bubble in 2008 were self certs. Hamish I am sure it was all self employed people buying then and not ordinary workers priced out of the market fibbing on wages.

Radio 4 are wrong.

They have included the fast-track figures in that.

wotsthat

brit1234 wrote: »

Radio 4 (Today Program) just now stated 50% of mortgages and the peak of the bubble in 2008 were self certs. Hamish I am sure it was all self employed people buying then and not ordinary workers priced out of the market fibbing on wages.

Have a listen to it again.

The stat was used not to demonstrate how many mortgages were self cert but how many applicants didn't have their earnings properly verified.

Most of those applicants will have been expecting their earnings to be checked by the lender and so it doesn't necessarily follow that 50% of all mortgages made at peak were given to people making up their incomes.

doire_2

Another nail in the coffin for loose lending

All those FTB's sitting in the wings hoping the banks would simply turn the taps back on will be in for a shock. This talk from the bulls about 'mortgage rationing' (what a stupid phrase) ending soon has all been wishful thinking.

Those FTB's who wised up and started saving for that all important deposit are now saying 'we told you so'. Those that didn't bother saving are now facing up to the fact thats its a long and hard road ahead. Silly people

RenovationMan

To perhaps move the discussion back onto topic and away from the usual bickering...

If self certified mortgages are withdrawn, how will self-employed people be able to buy a house?

EDIT: I had a look online on a few dedicated self serve websites and it seems that they are looking at ways to continue to provide this sort of service:

"Important News For Self Cert Mortgage Hunters...

The Financial Services Authority (FSA) has indicated that lenders will be required to specifically verify income and assess affordability of all new mortgages. In advance of any formal announcement by the FSA, lenders have ceased to offer Self Certified loans.

The Good News: Don't Despair! If you are self employed our panel of preferred mortgage brokers are finding alternative solutions for people in similar situations every day. Please Click Here to fill in our enquiry form or click here to close this popup and access the website."

http://www.self-cert-mortgage-centre.co.uk/

wotsthat

RenovationMan wrote: »

If self certified mortgages are withdrawn, how will self-employed people be able to buy a house?

It's always seem fairly obvious to me. If you are self employed and want a mortgage why not keep some decent accounts. That way income could be verified and affordability assessed.

Don't self-employed people keep accounts and records anyway? How else do they know how much tax they need to pay for example?

HAMISH_MCTAVISH

doire wrote: »

This talk from the bulls about 'mortgage rationing' ending soon has all been wishful thinking.

Mortgage rationing has nothing to do with "loose lending".

We can all agree that 125% mortgages were ridiculous and should be banned, and that affordability checks should be made and income verified.

But beyond that, mortgages should be available to FTB-s on historically normal, prudent and sensible terms, where a 5% or 10% deposit and a full time job was enough to get you a mortgage.

Which is clearly not the case today for the vast majority, as mortgages issued at 10% LTV or less are now just 1% of all mortgages issued due entirely to the banks rationing limited funds.