Bank Bailout Ahoy!

martinsurrey

Hutchch0920 wrote: »

5.5 x income is though.

if 5.5X income can go through the MMR affordability rules and tests, its still a none story as they could have lent that last week.

Generali

Hutchch0920 wrote: »

5.5 x income is though.

5.5x income having demonstrated no ability to save is a story and TBH we all know what happens next.

CLAPTON

Generali wrote: »

5.5x income having demonstrated no ability to save is a story and TBH we all know what happens next.

the young couple live happily ever after

cells

mwpt wrote: »

Over what time period are you measuring this? Defaults are a function of lenience of the banks and from what I hear, in the late 80s they weren't very lenient but are much more so now. Also, we've had falling rates for many decades which means existing owners benefit big time and default less.

Those maths guys at the banks need to listen to this internet guy. Because 2007 only happened over there, it could never happen over here. Can't lose in British bricks and mortar.

I'm waiting for 100% IO mortgages at 1% rates so I can afford the mansion on the river that I want.

My view is the regulators need not price risk and manage risk for the banks that the banks have data and more capacity to price the risk correctly than a Canadian in EC1

I think the biggest problem in the mortgage market right now is not the lack of 100% LTV or Interest only its more to do with the lack of self cert. That needs addressing and turning back just like the age caps had a u-turn but then again the old have more political power than the 10% or so of households that can only become owners via self cert.

cells

michaels wrote: »

It used to be accepted that not all loans would always pay back and banks adjusted interest rates according to risk so that they made enough from the risky borrowers who did pay back to cover the writeoffs on those who didn't - for example wonga, Northern Rock.

Now however it is against people's human rights for the bank to allow them to take out a risky loan so only loans where there is no risk to the bank and negligible risk to the borrower are allowed.

Very soon we will not be allowed to wipe our own a**s in case we get it wrong and Nannie State will employ someone to do it for us.

exactly,

banks should be able to write more risky loans and with the data price them accordingly.

To me a self cert (where you tick a box saying you are confident you can make repayments rather than handing over fake payslips) with 30% down is much less risky than a person with 3 months employment ad 5% down. However the current school of thought seems to be that the 30% down self cert person should be told 'computer says no' while the 5% down 3 months employed is welcomed in.

Its more down to politics than risk or banking or finance.

cells

Generali wrote: »

5.5x income having demonstrated no ability to save is a story and TBH we all know what happens next.

you are far too sceptical on these matters

in the real world a person using 5.5 x multiple will likely be a singleton. Either they get a partner in the future or take in a lodger in which case the true figure is going to drop possibly in half

We know that most places in the UK an average terrace is not close to 5.5 x joint median full time incomes. Its only when you go into London when that becomes true and then only when its the more expensive half of London

Generali

cells wrote: »

you are far too sceptical on these matters

in the real world a person using 5.5 x multiple will likely be a singleton. Either they get a partner in the future or take in a lodger in which case the true figure is going to drop possibly in half

We know that most places in the UK an average terrace is not close to 5.5 x joint median full time incomes. Its only when you go into London when that becomes true and then only when its the more expensive half of London

Why would they be a singleton? There is nothing to suggest that.

And don't forget, couples have kids as a rule so incomes go down and expenses go up.

We've seen the ending of this movie and it's a horrorshow.

cells

Generali wrote: »

Why would they be a singleton? There is nothing to suggest that.

because very few areas in the country cost 5.5 x joint full time incomes

And don't forget, couples have kids as a rule so incomes go down and expenses go up.

and ~500,000 inheritances are left each year and significant gifts thought peoples lives to the tune of £100B-£200B a year in just lil ole Britain

But if you only want to look at the negative sides I guess you can.

We've seen the ending of this movie and it's a horrorshow.

Really?

What horror story happened in the UK. How many bank depositors lost their £££??

What about in the rest of Europe?

The USA?


Compare that to the horror story of screwing the finances and wealth and by extension well being and happiness of perhaps 10% of all households (about 3 million households with 7-8 million people) by imposing overtight regulations and rules on the banking system

Generali

cells wrote: »

because very few areas in the country cost 5.5 x joint full time incomes



and ~500,000 inheritances are left each year and significant gifts thought peoples lives to the tune of £100B-£200B a year in just lil ole Britain

But if you only want to look at the negative sides I guess you can.



Really?

What horror story happened in the UK. How many bank depositors lost their £££??

What about in the rest of Europe?

The USA?


Compare that to the horror story of screwing the finances and wealth and by extension well being and happiness of perhaps 10% of all households (about 3 million households with 7-8 million people) by imposing overtight regulations and rules on the banking system

The GFC didn't really cost anything in lost savings because the Governments of the world spent hundreds of billions on bailing the banks out. Plus spent trillions on deficit spending, plus the couple of trillion of lost GDP.....per year.

The trouble is, a trillion here and a trillion there and all of a sudden you're talking a lot of money. :money:

Apart from that the cost of the GFC was pretty much nil and on the bright side your mortgage is a bit cheaper.

According to the various branches of the Fed, simplistically the cost will be $7-25,000,000,000,000 to the US alone although if you are interested the full, and fascinating, article from the AFR (Australia's FT) is here:

http://www.afr.com/news/policy/foreign-affairs/so-how-much-did-the-gfc-cost-20140121-iy7vy

Surely you aren't trying to argue that the GFC was costless. That would be mental.

mwpt

Generali wrote: »

Surely you aren't trying to argue that the GFC was costless. That would be mental.

But that was caused by a property market over there. Over here you can't lose in British bricks and mortar.