Guardian: 95% Mortgages "not a source of risk"

grizzly1911

grizzly1911 wrote: »

I don't dispute you facts but it doesn't answer my question.

I don't dispute that mortgage business is overall profitable and that defaults on the whole book are small.

Also meant to say don't forget many of those being turned aside now are just part of the risk screening process. The obvious outsiders.

The forced sales, repossesions, defaults are really the tip of the iceberg. The cost of managing those in arrears is high in operational costs, not just cost of funds.

Percy1983

Hamish in another 'caring for FTBs' to feed greed shocker.

Seriously, we all know what he wants and why he wants it and we all know he will deny this and pretend its out of caring for FTBs.

He does seem to be posting many threads saying the same thing so just leave him to it, the greed may clear eventually and he may see past his own nose then, but in until then don't try and engage in any kind of meaningful debate.

Conrad

As I've said all along the UK mortgage market remained highly ordered even in 07 - 09, but as ever the urban myth machine got going and 99% of us fell for it.

Lenders tell me that even thier lie to buy self cert books remain high performing with a very low delinquency rate.

Even self cert is a perfectly legitimate enterprise as millions of folk have non standard complex income regimes.

Hamish you often say to me lenders mis - interpret FSA rules, this is quite wrong. The central principle known as 'Treating Customers Fairly' would be used by a borrower in thier defence in Court should a lender use too much discresion. It just isn't worth taking the risk and having a future misselling scandal which is why this central FSA principle causes massive damage to lending.

Thrugelmir

Current average bank margins above funding costs are around 3%.

And? There's staff to pay, offices to run, computer systems to maintain, FSA levy's to pay.

ukcarper

Thrugelmir wrote: »

And? There's staff to pay, offices to run, computer systems to maintain, FSA levy's to pay.

What was that margin prior to crash

HAMISH_MCTAVISH

ukcarper wrote: »

What was that margin prior to crash

1%. And the profits were high then too.

grizzly1911

ukcarper wrote: »

What was that margin prior to crash

Does it matter?

Banks are commercial enterprises not charities.

There is no pre ordained right to be able to borrow money for any purpose.

ukcarper

grizzly1911 wrote: »

Does it matter?

Banks are commercial enterprises not charities.

There is no pre ordained right to be able to borrow money for any purpose.

True but if they made reasonable profits with a 1% margin before the crash they can do it now.

Not to mention fact that many are owned by us

I take it you wouldn't object if the energy companies trebled thier margins.

grizzly1911

ukcarper wrote: »

True but if they made reasonable profits with a 1% margin before the crash they can do it now.

Not to mention fact that many are owned by us

I take it you wouldn't object if the energy companies trebled their margins.

A lot of their income is fee income and cross sales in addition to the lending margin.. If they aren't doing the business then this income falls. their overheads don't fall as quickly and cost/income ratios deteriorate or they compensate somewhere else.

IF RBS and Lloyds are state controlled, in one way or another, why doesn't the government simply turn on the taps?

Wouldn't have much choice if I want to buy it energy. I could go to a "competitor" and see if they would supply it cheaper. Oh, wait, no that doesn't seem to work either. In fact I don't really have a clue what margin they really make with their supply model.

If I couldn't afford it I wouldn't buy it.

BTW Dividend at Centrica increased to c.5%, Barclays c.2% (used to be c.5%).

Percy1983

I would say having to refund everybody who took out PPI can't be helping.