MSE News: Fall in home purchase loans 14 September 2012 at 9:58AM in Mortgages & endowments 4 replies 1.2K views

Former_MSE_Helen

"Loans for home purchases slumped by 8% last month as lenders clamped down on mortgages for those with small deposits ..."

Read the full story:

Fall in home purchase loans

Pincher

So, when old money market tranches mature, and they have to pay them back, they just use the Funding for Lending money to pay them off. It's cheaper to borrow on the scheme, than to rollover at Money Market rates. This increases the profit margin on existing mortgage book, without additional risk of new lending.

In the mean time, the wholesale money market has less business, leading to redundancies, maybe?

Stop feeding the banks, take the money back.
Just guarantee low LTV mortgages, which doesn't cost ANYTHING if you are lucky. In the event of default, the payout is the difference between the auction price and the outstanding loan. The banks might try it on with early redemption penalties and fees, but we just guarantee the outstanding balance.

Butterfly_Brain

So how will the government's policy of building more houses to get us out of recession make any sense?

brit1234

MSE_Helen wrote: »

"Loans for home purchases slumped by 8% last month as lenders clamped down on mortgages for those with small deposits ..."

Probably just protecting themselves from falling house prices. Small deposits in a falling market is not good for a healthy mortgage book.

HAMISH_MCTAVISH

brit1234 wrote: »

Probably just protecting themselves from falling house prices. Small deposits in a falling market is not good for a healthy mortgage book.

Except of course, that house prices are rising.;)

(And you need to update your signature)