How much new money is available for mortgages today.

Thrugelmir

Emy1501 wrote: »

Banks can still lend to who they want can't they? They just choose not to

Banks are still lending. Just fewer of them.

julieq

Who said NR was well run? I certainly didn't, and I pointed out it had an arguably reckless business strategy. I'm frankly not interested in anything they reported prior to the collapse, because we can now see the situation as it ended up.

125% loans are not in themselves reckless which was the point at issue. They were being repaid prior to the crisis and the problems NR had were liquidity to repay savings liabilities because they found themselves with assets they couldn't offload via securitisation. The report I posted is excellent and goes into great detail.

Thrugelmir

julieq wrote: »

The report I posted is excellent and goes into great detail.

Which is part of a much larger report. THE FAILURE OF NORTHERN ROCK A MULTI-DIMENSIONAL CASE STUDY. This included the following

In two major respects, the crisis that hit Northern Rock was both predictable and, to some extent, predicted even though this was not related specifically to this bank in particular. Firstly, for well over a year the Bank of England,and to a lesser extent the Financial Services Authority (FSA), had been warning about evolving trends in the markets: sharp asset growth, systemic under-pricing of risk, and some warning signals were given that some of the risk-shifting characteristics of new financial instruments (most especially
credit derivatives such as Collateralised Debt Obligations and Credit Default Swaps) might not be as water-tight as they might seem. There were also warnings that the bank’s strategy of relying heavily on wholesale market funding made it particularly susceptible to liquidity risks. Secondly, and more fundamentally, there were certain institutional weaknesses in the UK’s regulatory regime that made it susceptible to problems such as those that arose with Northern Rock

NR lent 25% of all new mortgage advances in the first half of 2007. Although it was only the Uk's 7th largest lender at the time. Aggressive growth at what cost? Jury is still out.

http://www.suerf.org/download/studies/study20091.pdf

Percy1983

Look at it this way, houses are in short supply so there is 2 ways to distribute them.

1, Give out mortgages like sweet and watch prices rise, eventually a whole generation will be priced out.

2, Restrict mortgages to those who can prove they can handle their finances, this way the financially savvy will be able to afford homes for many generations while the financially inept will always be excluded.

So which sounds fairer, to summarise the above:

1, First to the bank and ask for a mortgage.

2, Financially apt people get first bite.

Thrugelmir

julieq wrote: »

I'm frankly not interested in anything they reported prior to the collapse, because we can now see the situation as it ended up.

Most information actually surfaces long after the event. Understanding history explains today, and shapes tomorrow.

homelessskilledworker

Graham_Devon wrote: »

Oh PURLEASE julie.

Interest rates were cut to 0.5%. SMI kicked in earlier. Northern Rock themselves had even lower repo's than any other bank due to public ownership and the creation of the "bad bank". It was even featured on the BBC news that Northern Rock would do all it could to stop any reposession due to public ownership.

Of COURSE repo's and arrears are going to be lower than they might have been. The key fact is that they are still as high as "normal" times according to the CML, even AFTER all of that.

For pities sake....surely you have got to be on a wind up.

Why do you bother with her? It did not take me long to realise that she has an agenda, every poster that does not conform to her manta is a moron, she believes that her thinking is way beyond anyone elses comprehension.

I have watched her wittle on about what she thinks is factual on lending, debt and Banks and I just think WOW!!, it is just not worth wasting you breath with know it all's like her.

Its simple, you agree with Julies world and you are ok or you disagree and are a !!!!.

julieq

touched a nerve did I? :O

AD9898_2

Conrad wrote: »

Great post.

In the end Graham and co welcome stricter lending but at what cost and to what benefit? I'd say the Human cost is far greater than the benefit as millions are now frozen out of home ownership even though the stats indicate only a tiny minority of them had they been able to buy, would have ended up repossessed.

The societal detriment resulting from increased regulation far outweighs and supposed benefit.

AGAIN, self cert mortgages according to lender reps I meet, have had very low repo rates, as it is felt the such mortgagees are less likely to give up without a fight as they dont want to loose the considerable cash stake they originally had to input to get the mortgage. It really is an urban myth that self cert was toxic in our nation.

The bottom line is, you can blame today's regulation as a reaction to the frankly unbelievably bad lending/borrowing practices of the period 2000-2007, which is a major reason that we are in the predicament we find ourselves in.

If house prices had been kept in check with correct borrowing practices that I had to deal with in 96 when I first bought, we would be a long way from where we are now.

Incredulously, you and others perceive that the only way to get out of the mess we are currently in is to 'carry on as before'... I'm afraid that isn't the answer and would in the end spell total disaster.

It's a bitter pill, but only one of many we will be forced to take over the coming years.