New mortgage lending rules come in this weekend

CLAPTON

zygurat789 wrote: »

Is it the leaning banks which collapse?

one might purpose so.

BillJones

GeorgeHowell wrote: »

Obviously I can't attribute anything to you personally. But unless we have been grievously misinformed by virtually the whole of the press and media it was reckless lending in pursuit of targets and bonuses, particularly in the housing sector, that was a major factor in the banking crash of the late 2000s.

The bonuses that you read abut in the papers are paid in investment banks, and are completely unconnected to mortgage lending by retail banks.

My P+L and general performance (i.e. being a good manager, not taking large risks, being available for client meetings etc.) is the main factor in my bonus, as is the case across the investment bank.

There isn't any conceivable route that lending decisions in a retail bank with the same name over the door can feed in to what I am paid (unless they blow up the group), and equally, there's nothing that the retail staff can do to get access to the sort of bonuses paid in the investment bank.

And....

It was not UK mortgage lending that lead to the crash. It was banks having bought US mortgages recklessly.

zygurat789

BillJones wrote: »

The bonuses that you read abut in the papers are paid in investment banks, and are completely unconnected to mortgage lending by retail banks.

My P+L and general performance (i.e. being a good manager, not taking large risks, being available for client meetings etc.) is the main factor in my bonus, as is the case across the investment bank.

There isn't any conceivable route that lending decisions in a retail bank with the same name over the door can feed in to what I am paid (unless they blow up the group), and equally, there's nothing that the retail staff can do to get access to the sort of bonuses paid in the investment bank.

And....

It was not UK mortgage lending that lead to the crash. It was banks having bought US mortgages recklessly.

Tell that to the Co-op

CLAPTON

zygurat789 wrote: »

Tell that to the Co-op

I thought that the Britannia BS bad loans were with commercial and not retail customers

ViolaLass

chucky wrote: »

Buying is and should be a big sacrifice, it's not an entitlement that everyone is able to do and still maintain the life and spending patterns previous to buying.

Should that necessarily be true? We replaced rent and deposit savings with mortgage and house savings (not true to the penny but broadly the case and I don't see why it shouldn't be so for other people too). Spending patterns after buying were broadly the same, if not on the same things.

Thrugelmir

CLAPTON wrote: »

I thought that the Britannia BS bad loans were with commercial and not retail customers

Just like much of HBOS's bad loan book. Lloyds had relatively little.

chucky

ViolaLass wrote: »

Should that necessarily be true? We replaced rent and deposit savings with mortgage and house savings (not true to the penny but broadly the case and I don't see why it shouldn't be so for other people too). Spending patterns after buying were broadly the same, if not on the same things.

If more people are able to buy there is more demand and if there is more demand with a relatively static supply we will see even bigger prices increases.

Be careful what you wish for.

antrobus

zygurat789 wrote: »

Tell that to the Co-op

Or Northern Rock.

Or Bradford & Bingley.

Or the Dunfermline Building Society.

ViolaLass

chucky wrote: »

If more people are able to buy there is more demand and if there is more demand with a relatively static supply we will see even bigger prices increases.

Be careful what you wish for.

I wasn't wishing for anything, just not necessarily agreeing with the idea that your spending patterns have to change greatly after you buy. It might be relevant to state here that we didn't borrow the maximum we could have, for example.

chucky

ViolaLass wrote: »

I wasn't wishing for anything, just not necessarily agreeing with the idea that your spending patterns have to change greatly after you buy. It might be relevant to state here that we didn't borrow the maximum we could have, for example.

That's very prudent and sensible.