Excellent article by Stephanie Flanders

DervProf

Graham_Devon wrote: »

The amount of fraud you openly state you are involved in on this forum is worrying.

To anyone who "shot me down" when I previously suggested dodgy lending practices, maybe you'd like to read Conrad's very revealing post.

Maybe this is just a new thing, because apparently, the fact that there haven't been many repo's in recent years, means that there can't have been many "dodgy" mortgages granted during the 00's.

Having said that, I'm sure Conrad tells his clients that he can only grant, or apply for mortgages based on declared income.

Generali

DervProf wrote: »

And in more other words, there seems to be a lot of fraud taking place.

Do you have a duty to report this kind of behaviour ?

I used to have to train employees in money laundering and if you suspect somebody is money laundering (for example using undeclared cash to buy property) and you work in financial services then you must report it. Failure to do so can lead to an unlimited fine and up to 14 years in prison.

Note I use the word 'suspect' rather than 'know'.

DervProf

Generali wrote: »

I used to have to train employees in money laundering and if you suspect somebody is money laundering (for example using undeclared cash to buy property) and you work in financial services then you must report it. Failure to do so can lead to an unlimited fine and up to 14 years in prison.

Note I use the word 'suspect' rather than 'know'.

Interesting.

Do these rules still apply ? I would have thought that they do, given recent goings on in the financial world.

I wonder if Conrad has ever reported anyone for money laundering ?

Thrugelmir

RUN_RABBIT_RUN wrote: »

no, the mortgage product withdrawal had already started in earnest in spring 2008 and it was the global credit crunch itself which triggered the problems here in the uk. the 100% mortgage disappeared literally within a matter of days in march/april 2008.

Once the Treasury got to grips with Northern Rock (took ownership) in September 2007. All new lending ceased. It took 6 months to understand the extent of the problem!

Around March/April 2008 Bradford and Bingley ceased as well.

In effect that was over 20% of all new mortgage funding removed from the market over night. (20% of funding levels at the time).

crash123

julieq wrote: »

Debts are assets on lenders balance sheets.

It's a very well balanced article, and it is starting to introduce the idea that there isn't a significant personal debt problem in the UK, which is precisely what the evidence suggests. The credit crunch was caused by bad lending in the US which banks took onto their balance sheets in securitised form, not by any structural problems with the UK credit market. In the UK personal debt default is miniscule and perfectly well managed by the banks.

Debts/assets that the banks can`t afford to write down.
Oh no I`ve lent 60 billion on houses and they are only worth 40 billion now. Don`t worry they are still worth 60 billion on our balance sheet.:rotfl:

Thrugelmir

pqrdef wrote: »

it hardly seems like the right time to sink capital into setting up shop.

Why not?

Its hard work that sets entrepreneurs aside from employees. A desire to better themselves and their families. You create your own luck and good fortune.

Emy1501

RUN_RABBIT_RUN wrote: »

no, the mortgage product withdrawal had already started in earnest in spring 2008 and it was the global credit crunch itself which triggered the problems here in the uk. the 100% mortgage disappeared literally within a matter of days in march/april 2008.

the default rates that you quote aren't much of a surprise, i'd expect those ratios to endure because it's rather obvious that a mortgage with a larger amount outstanding and thus lower flexibility to refinance would be more likely to be defaulted.

the credit crunch itself led to banks either bringing the shutters down on lending or, in the case of northern rock, being literally shut down themselves. consumer confidence went through the floor, so businesses started struggling and unemployment started soaring.

a good timeline here -

http://news.bbc.co.uk/1/hi/7521250.stm

Still enough money around in early 2008 for 70-80k worth of mortgages to be approved. We know that for prices to fall you people to be in financial distress and need sell. Unemployment figures in early 2008 were around 5% so for me people relying on rolling over their mortgages for cheap rates mainly in the categories mentioned found they couldn't roll over debt cheaply as before causing them to be forced to sell.

hallmark

julieq wrote: »

Surprised this hasn't been noted yet

http://www.bbc.co.uk/news/business-17398014

Bears won't like it though.

Lol at your casual assertion that anyone with a bearish disposition will or won't like something.

Staggeringly ignorant & superior attitude that's woefully misplaced.

pqrdef

Thrugelmir wrote: »

Why not?

Its hard work that sets entrepreneurs aside from employees. A desire to better themselves and their families. You create your own luck and good fortune.

Why are most of the pubs round here boarded up then? Business opportunities going cheap, and running a pub used to be considered nice work if you could get it.

John_Pierpoint

Bricks and mortar are horribly over taxed and probably on upward only rent reviews - the classic "rack & ruin" situation.

Meanwhile our shopping habits have changed - a lot of stuff can be bought cheaply over the internet and a surprisingly large turnover can be achieved operating from permitted development "garages" in domestic "curtilages". Just check out the activities in the barns of many subsidised "farms".

When it comes to alcohol, the buying power of the supermarkets versus the prices charged to "tied" rented pubs, means that many of them are not profitable. For a time the increasing value of the property could result in equity withdrawal, but soon just getting change of use to domestic housing was the road to riches.
Some of those pubs & shops in villages and neighbourhoods are now stuck in limbo.