Liar Loans Reborn

Generali

mwpt wrote: »

Oh it says in the article:



Very competitive. 2.5% rate on 15% deposit (I assume they meant borrowers must put down deposit above).

But it sounds a bit barmy from an investment perspective to me. That is unsecured lending, at ridiculously low rates to people for whom you have no risk profile. I think I'll avoid.

Aren't these mortgages? I thought they were.

carslet

Excellent idea

mwpt

Generali wrote: »

Aren't these mortgages? I thought they were.

I read it as P2P lending from an offshore institution. I don't know specifics but I'd be surprised if they were secured on the property. Could be though.

DiggerUK

It's not clear if it is p2p. But then again what counts as p2p.....crowdfunding? shadow banking? payday loan?..._

Generali

mwpt wrote: »

I read it as P2P lending from an offshore institution. I don't know specifics but I'd be surprised if they were secured on the property. Could be though.

I don't see how an unsecured loan could be so cheap. Maybe it's P2P for compliance reasons.

There is no reason I can think of that a P2P loan needs to be unsecured.

catwoman73

It's a mortgage so secured. However, there doesn't seem to be much scope margin on base rate+2%.

A house price correction plus a couple of defaults would seriously threaten the viability of their business, surely?

Generali

catwoman73 wrote: »

It's a mortgage so secured. However, there doesn't seem to be much scope margin on base rate+2%.

A house price correction plus a couple of defaults would seriously threaten the viability of their business, surely?

Perhaps the plan is to take origination fees and then let the business go bust....?

Just sayin'.

cells

this is good news and it should not be seen as liar loans. the self cert part should just be ticking a box 'i am confident i can service this mortgage' rather than supplying fake pay checks

the bank has the security of the 15% deposit should a borrower has a good incentive to not default.

I have had a look at their website and its not even up so they may not be ready yet.

Also they might just not be a bank at all. They might just be a business loaning out its own money. A bit more like a borrower and lender matching service. Too bad its website is not up yet more info would have been useful

dktreesea

Still not quite live yet.
http://selfcert.co.uk/

mwpt

Sorry, I read it more closely. Backed by internet investors. What doe that mean? Crowd-funding, basically P2P? How are they able to obtain a claim on the house as collateral from what appears to be a relatively noddy operation run on in a foreign country? How are they able to classify their products are mortgages? Surely the UK authorities have to be involved in some way to allow that corporation to make a claim on the property, in which case, since they already ban this type of lending....

I guess we'll just have to see.