Mortgage lending end of self cert.

[Eric Mc]

Guam said:

Eric Mc said:

Does not surprise me one iota.

Nor me but this was tantamount to fraud, so why penalise the majority AGAIN for the sake of an inneffectively policed minority?

It seems to me this is a general tendency these days

The banking sector has effectively penalised itself. Abuse was too rife for the system to continue. In a way, market forces have "found out" the flaws in self certification by putting the lenders into a precarious financial situation. The withdrawl of self certification is, in effect, the lending market self correcting to a more rational form of behaviour.

[Justayellowbadge]

Eric Mc said:

Oakey said:

Eric, as a graphic designer I can't begin to tell you the number of people I've worked with over the last 8 years or so who'd come to me wanting me to fraudulently knock up dodgy pay slips and the like in Photoshop so they could get mortgages.

Does not surprise me one iota.

I'm staggered, actually.

Why go to a graphic designer when mobs like this exist: http://www.payslipsplus.co.uk/

[Eric Mc]

Justayellowbadge said:

I'm staggered, actually.

Why go to a graphic designer when mobs like this exist: http://www.payslipsplus.co.uk/

Is that legal?

[Justayellowbadge]

Eric Mc said:

Justayellowbadge said:

I'm staggered, actually.

Why go to a graphic designer when mobs like this exist: http://www.payslipsplus.co.uk/

Is that legal?

I presume the 'service' is, but what purpose one puts it to may not be.

[scotal]

Northern Munkee said:

Less well reported but fundamentally going to affect house prices even more, is a return to a 3.5multiple.

Where are you seeing that?

[Oakey]

Holy crap, have you seen the prices? I'm in the wrong business.

[Derestrictor]

Eric,

To what extent do you reckon UK loans were 'as' sub prime as in the US?

We recently acknowledged the effects of the ratings agencies' on the broadest issue of sentiment and I'm reasonably persuaded that this may be (as others are suggesting) another 'negative nail,' as it were, ito that same, broad confidence when in practice, criteria have already tightened quite naturally.

Seems to me the vast majority of mortgagees are and always have been risky but latter day appraisal of this economic imperative (i.e. risk/viability) - and its increasing replacement by relatively stagnant 'do little/nothing' proposals - may suit the small number of baby boomers who 'got out' just in time/inheritors of juicy wee baronetcies () but otherwise may simply serve to embolden the stark and portentous comments of Mdme. Lagarde.

[Eric Mc]

Justayellowbadge said:

I presume the 'service' is, but what purpose one puts it to may not be.

The only entity that can produce a "legal" P60 is the employer of the individual or an appointed agent (such as accountant or payroll bureau) of the employer. I am pretty sure that an employee cannot approach a third party of his own chosing to have a P60 printed off based on details provided by the employee.

[Northern Munkee]

scotal said:

Where are you seeing that?

Highlighted on 5live by the head of a city of London recruitment company, who says because it's a less newsworthy headline it's slipping passed everyone. Think it's rolled up into "more responsible lending/tougher tests on mortgage affordibility". If it's true, then 1st time buyers are stuffed initially and a much bigger house price correction is coming given average earnings, which will affect everyone save the rich, I suppose.

[Eric Mc]

Derestrictor said:

Eric,

To what extent do you reckon UK loans were 'as' sub prime as in the US?

We recently acknowledged the effects of the ratings agencies' on the broadest issue of sentiment and I'm reasonably persuaded that this may be (as others are suggesting) another 'negative nail,' as it were, ito that same, broad confidence when in practice, criteria have already tightened quite naturally.

Seems to me the vast majority of mortgagees are and always have been risky but latter day appraisal of this economic imperative (i.e. risk/viability) - and its increasing replacement by relatively stagnant 'do little/nothing' proposals - may suit the small number of baby boomers who 'got out' just in time/inheritors of juicy wee baronetcies () but otherwise may simply serve to embolden the stark and portentous comments of Mdme. Lagarde.

It's hard to say.

Based on what I have read, the main problem with "liar loans" was defintely in the US but the practice seems to have been widespread here in the UK and other parts of Europe too (Ireland and Spain being the two most prevalent areas). And as the whole banking system is/was global in nature, the toxic debts created by these practices crossed international boundaries anyway, contaminating banks all over the world.

[scotal]

Northern Munkee said:

Highlighted on 5live by the head of a city of London recruitment company, who says because it's a less newsworthy headline it's slipping passed everyone. Think it's rolled up into "more responsible lending/tougher tests on mortgage affordibility". If it's true, then 1st time buyers are stuffed initially and a much bigger house price correction is coming given average earnings, which will affect everyone save the rich, I suppose.

I think he's making it up, the consultation paper, or the bit I've read so far, only refers to affordability and its demonstration and not a 3.5x income multiple.


Totally seperately, in 2006/7 £581bn of mortgages were granted, of those £269bn had no income checks performed whatsoever. Not all of this was self cert, the majority was fast-tracked. That alone seems to be a good enough reasn to require income verification on all mortgages going forward.

[marsred]

Northern Munkee said:

scotal said:

Where are you seeing that?

Highlighted on 5live by the head of a city of London recruitment company, who says because it's a less newsworthy headline it's slipping passed everyone. Think it's rolled up into "more responsible lending/tougher tests on mortgage affordibility". If it's true, then 1st time buyers are stuffed initially and a much bigger house price correction is coming given average earnings, which will affect everyone save the rich, I suppose.

Its all just a consultation at this stage anyway (not that FSA have form for taking too much notice of the actual consultation feedback). Maybe they intend to do all they are consulting on, maybe they just want to jump about and show everyone how serious and frightening they are.

[Gary11]

MX7 said:

You don't approve of people borrowing within their capabilities?

I didnt say that I said further tightening of lending criteria will be bad for the housing market.

[Muncher]

You mean it'll be bad for the sellers in the housing market.

[Gary11]

jdw1234 said:

I don't understand why this will "supress" the housing market.

It means values wont be inflated by "liar loans".

Therefore, if houses are more affordable, more transactions can happen.

Also, people who buy houses for more realistic values will have more cash to spend in the "real economy".

Also, if you wish to trade up, the next step will be smaller.

I understand your sentiments but am making the point like it or not it will supress the housing market,they need today to assess people who really can pay from people who cant in a real time manner,it isnt black and white,current lending criteria and non existent mortgage advances have cured the cold already to a degree,IMO there isnt only one perfect grade of buyer,people do have blips for various reasons in these less than profitable times and could still be a homeowner instead of sending them to the rental sector.

[Eric Mc]

The housing market was way too hot anyway. It needed calming down.

[Gary11]

Muncher said:

You mean it'll be bad for the sellers in the housing market.

Do I?

[Gary11]

Eric Mc said:

The housing market was way too hot anyway. It needed calming down.

Eric it certainly is cold right now and very calm.

[SillyALFALove]

Justayellowbadge said:

I'm staggered, actually.

Why go to a graphic designer when mobs like this exist: http://www.payslipsplus.co.uk/

Woweee, crazy prices.

Years back I know of guys who got mortages with half an hour in excel or word and the creation of 3 payslips as they were cash in hand. No questions asked.

This year I have had to jump thorugh the hoops as a sole trader to get a mortage, rightfully so as well I belive. I knew this was coming up and have always run my books as honestly as we can understandiung its a double edged sword thats means a tax bill but also it means we become mortgageable. We know what the rules are as self employed or directors and cant have our cake and eat it.

Self cert, in reality would have made my life easier and more straight forward but the books were there so not a problem other than meeting all the requests. Yes I agree many (maybe a higher proportion of PH`ers) would have treated self cert in a sensible manner but there are also many who would have been cash in hand, running books to suit one scenario (and not the other) or pure fantasists whom could not afford the mortgage with a rate rise who have mistreated SC. I dont think that really any of whats being reported in the news is any different to the current criterior that lenders have been asking since we saw the world turn upside down and spin in reverse (which only seems to be getting faster)

Yes, these proposals would have lessened the banks exposure to bad debts in the UK but they are primarily being put in place to prevent a repeat in the distant future.I dont belive they make any differece to the current market..

[4sure]

And lets not forget the reality that up to a couple of years ago the banks did not really care if the figures on payslips or accounts were genuine or heavily massaged.

If the lender defaulted or in any way failed to make payments,the property would be quickly reposessed and sold on for a quick profit.

Much different now of course (and rightly)

But i do feel sorry for many a young couple who both work hard and pay rent regularly for years without problem, but do not qualify for a mortgage on a modest property that in some cases is up to half the ammount presently being paid in rent.