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Excellent article by Stephanie Flanders
Comments
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HAMISH_MCTAVISH wrote: »Here's another interesting fact: the median loan-to-value ratio on a new mortgage didn't go up during the "boom" years - in fact, for most of the 1990s and noughties it was falling.
That's consistent with the idea that rising house prices caused bigger mortgages - not the other way around.
Told you so again.
If you read the FSA research into defaults in 2008 you will find that self cert, BTL and people with bad credit were the problem not those with high LTV mortgages.0 -
HAMISH_MCTAVISH wrote: »Here's another interesting fact: the median loan-to-value ratio on a new mortgage didn't go up during the "boom" years - in fact, for most of the 1990s and noughties it was falling.
That's consistent with the idea that rising house prices caused bigger mortgages - not the other way around.
Told you so again.
Behave yourself.FACT.0 -
the_flying_pig wrote: »Behave yourself.
Nope. Absolutely refuse to.
I've put up with dogs abuse for the last 3 years pointing out all the facts that are now being highlighted by one of the country's top economists.
So now....
“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Surprisingly, the people who are £350K in debt aren't benefit-scrounging chavs living on sink estates. They're generally to be found living in "owner-occupied" houses that used to be worth over £350K.Other problem with uk debt and wealth is the wealth is owned by a certain type of person and the debt owned by another.
Debt is a big social problem in that many people with lower incomes are out of their depth. But the amount of money they owe is less than many other people would borrow to buy their second or third car without giving it a thought. Their debts don't have economic impact. The big numbers come from the big debtors, and the big debtors are the rich."It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis0 -
Surprisingly, the people who are £350K in debt aren't benefit-scrounging chavs living on sink estates. They're generally to be found living in "owner-occupied" houses that used to be worth over £350K.
Debt is a big social problem in that many people with lower incomes are out of their depth. But the amount of money they owe is less than many other people would borrow to buy their second or third car without giving it a thought. Their debts don't have economic impact. The big numbers come from the big debtors, and the big debtors are the rich.
I'm not talking benefit scroungers etc. I'm talking about the people in the categories I mention who took on debts based on discounted mortgages who found they could not re mortgage at the end of 2007 and found themselves on SVRs they could not afford.
Most of wealthy people I know are having no problem paying down their debt or increasing their wealth.0 -
HAMISH_MCTAVISH wrote: »Nope. Absolutely refuse to.
I've put up with dogs abuse for the last 3 years pointing out all the facts that are now being highlighted by one of the country's top economists.
So now....]
Just no. Seriously.FACT.0 -
In the US, bad lending is good business, as long as the security holds its value. Negative equity is the time-bomb.The credit crunch was caused by bad lending in the US which banks took onto their balance sheets in securitised form
It goes off when the wholesale lenders decide they can no longer retain any semblance of dignity while maintaining the pretence of believing the asset valuations on the banks' balance sheets. The Northern Rock moment.
In the UK banks, the time-bomb is still ticking."It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis0 -
I'm not talking benefit scroungers etc. I'm talking about the people in the categories I mention who took on debts based on discounted mortgages who found they could not re mortgage at the end of 2007 and found themselves on SVRs they could not afford.
thats a very very specific subset of people you're talking about there, also difficult to pin down in terms of a number
repos have, for the last few years, been around the 40,000 mark out of a total of over 11 million mortgages outstanding. even if you go by the mortgage arrears data, you're still looking at around 200,000 mortgages in up to 12 months of arrears at the peak.
i'm just not sure that what youre focusing on has the impact you are implying.
EDIT: link to the data i'm looking at - www.parliament.uk/briefing-papers/SN00263.pdf'Be not deceived; God is not mocked: for whatsoever a man soweth, that shall he also reap.'
GALATIANS 6: 7 (KJV)0 -
Surprisingly, the people who are £350K in debt aren't benefit-scrounging chavs living on sink estates. They're generally to be found living in "owner-occupied" houses that used to be worth over £350K.
Debt is a big social problem in that many people with lower incomes are out of their depth. But the amount of money they owe is less than many other people would borrow to buy their second or third car without giving it a thought. Their debts don't have economic impact. The big numbers come from the big debtors, and the big debtors are the rich.
Doesn't surprise me at all that the banks don't tend to lend large amounts to 'benefit - scrounging chavs' (as you put it). Who would you rather lend to, those with or without the apparent means to pay you back?Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop0 -
RUN_RABBIT_RUN wrote: »thats a very very specific subset of people you're talking about there, also difficult to pin down in terms of a number
repos have, for the last few years, been around the 40,000 mark out of a total of over 11 million mortgages outstanding. even if you go by the mortgage arrears data, you're still looking at around 200,000 mortgages in up to 12 months of arrears at the peak.
i'm just not sure that what youre focusing on has the impact you are implying.
EDIT: link to the data i'm looking at - www.parliament.uk/briefing-papers/SN00263.pdf
According to the FSA default rates for the areas I mention with mortgages of 90% plus stood at about 8% compared to about 2.5% for the normal market. Umployment in early 2008 was the same as 2006 and standard mortgages including 100% mortgages were widely available in spring of 2008 months after the crash here started.
Therefore something triggered the crash here before the credit crunch took hold in late 2008.0
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