Official. No more Liar loans. Celf cert banned.

shortchanged_2

julieq wrote: »

The proof of the pudding ultimately is in the eating, and essentially my model of the market has given CONSISTENTLY better predictions than yours. I guess that's why you're bringing in ad hominems based on a misrepresentation of what I've said. It's tiresome, but ultimately the idea that forcing me out of a discussion because you don't like what I'm saying is somehow going to change the outcome is ridiculous and shows the paucity of your own arguments.

If you're wrong on your basic assumptions - which the data indicates - then I'm afraid your conclusions are likely to be way off. As indeed they are. Have you never stopped to think why you never get any of this right, where people like Hamish put up directionally correct predictions year in year out? You're looking at the same data and you know the same facts. How come you ALWAYS get it so wrong?

Didn't you also say some time ago julieq that the housing market didn't need first time buyers to be sustainable?

Mmmmmm..........lets look what's happening now. http://www.telegraph.co.uk/finance/economics/houseprices/8961917/Second-time-home-buyers-priced-out-of-market.html

Conrad

The majority of applicants are asked to evidence thier income now, hence the huge growth in online fake payslip providers.
Millions of folk have complex non standard affairs, for example more than 1 job (lenders will not take all such income fully into account), and many such people would still rather not be forced to make a landlord richer.

No matter how fierce the rules people will find a way around them.

I of course will not entertain such clients, however, what is happening is that some unregulated brokers are charging a large 'knowledge fee' - simply telling the clients how to beat the system and the clients then approach lenders directly. If anything THIS IS WORSE THAN THE PREVIOUS SYSTEM WHERE MOST BROEKERS WERE ON THE FSA RADAR.

Conrad

shortchanged wrote: »

The bottom line is if you can't afford it, you can't afford it.

Arrears levels on self cert mortgages are lower than on standard mortgages.

You need to understand that many many folk have genuine reasons to self cert, although some of course are iffy.

EXAMPLE, a fireman;

Most firemen I've dealt with run a second job on thier 3 - 4 days off per week.
This is typically self employed.

Lenders will lend c3.5 x the fire sevrice income, but only allow 1 x the second income, but this is illogical, the guy can perfectly well sustain a loan equating to 3.5 x TOTAL income. The fireman has often had his second income as long as the first and it is perfectly sustainable.

It's reasons like this that many people simply do not fit the mould BUT IT DOES NOT MEAN THE LOAN IS UNAFFORDABLE.

Graham_Devon

One of the biggest factors, fo rme, isn't the self cert thing. It's the interest only mortgage.

There are many who have no way of actually buying their house at the end of the mortgage period. This is what the FSA seems to have realised and has concentrated on, along with other things, in this proposal.

Interest only mortgages are starting to catch people out now. Though theres a good 10-15 years to go in many cases. I know of 3 couples who realised they would never be able to repay the loan personally. One being mum and dad.

The removal of interest only, unless a rigourous and proper stratgey for repayment is in place, is one of the biggest proposals I beleive. The difference between buying on interest only as apposed to repayment can often double your affordability. If that tool which allows a doubling, or more, of affordability is being removed, that's will have a large impact. Maybe not so much on house prices, but certainly on transactions...which only prolongs the problems. However, put those realising they can't afford to pay the loan off at the end of the term into the selling basket, and less people to sell to (due to not being able to finance the loan as a new buyer), and you only really have one outcome. It may just be a long, slow process of getting there.

Conrad

LadyLL wrote: »

I think there is lots of valid reasons as to why we are in this position.

the shocking ways our banks and lenders have been throwing mortgages and loans etc to any person

Can anyone here point me to statistics that inform this picture?

As far as I know we have a VERY orderly market with very low repo levels.

geneer

Conrad wrote: »

As far as I know we have a VERY orderly market

And

Conrad wrote: »

I am a Mortgage Adviser

Do give up the day job.

Conrad

geneer wrote: »

And



Do give up the day job.

Give us a link demonstrating that we have anything other than an orderly mortgage market. Obviously it will require independant national statistics on repo levels and other indicies.

I'm waiting........

Conrad

Graham_Devon wrote: »

One of the biggest factors, fo rme, isn't the self cert thing. It's the interest only mortgage.

I think that's a fair summation.

I meet lender reps and they tell me thier self cert books are the best performing parts of thier portfolio, and the reason behind this is that most self certs required large deposits which people don't give away lightly (repo leads to the deposit equity being swallowed).

geneer

Conrad wrote: »

Give us a link demonstrating that we have anything other than an orderly mortgage market. Obviously it will require independant national statistics on repo levels and other indicies.

I'm waiting........

Conrad, you may be alright, and you may just get bovine drolling monkets who will accept your every word on the state of the housing market.

But I suspect they simply won't get through the checks anymore.

If you every want to earn any more comission, you really don't want those sensible potential buyers to feel like your as honest and knowledgable as a used car salesman.

lostinrates

RenovationMan wrote: »

I worked as an IT contractor for three years and earned an average of £100k over that period (and paid a lot less tax than as a PAYE due to the usual tax dodges). I had very accurate accounts, but if the banks insisted on (say) 3 years worth of accounts to prove income, I'd have been snookered.*.

perhaps that's part of the benefit for the country....making ''dodges'' less atractive? I think conrad has said in the past (and a paraphrase!) many of his clients are rolling in it but not on paper...perhaps the idea is to force people's hand to make a choice here to live more humbly in the short term on hat they declare or to declare more thoroughly.