Cyprus and banks

[Resurrection Man]

I sometimes wonder if you're carbon-based, RM?

Niot everyone has a Geoffrey Robinson to lob a few hundred thousand in their direction when they want to buy a property beyond their means, y'know

Missing the point - AGAIN!

I made no comment regarding affordability of houses and so please stick to the point. The fact is that money was readily available for people to over-stretch themselves. Which many people did. The banks didn't force them to sign on the dotted line. Now we also have negative equity in many instances and that doesn't help the housing situation.

[Resurrection Man]

....
In any case, lenders calculate risk. The decisions are theirs.

Oh wonderful...what became of taking control of one's own destiny? Nobody forced people to sign up to 110% mortgages. They did it themselves. And yes, those mortgages and high multipliers did exist. I had one and know of several others who also did.

[Resurrection Man]

that is just supposition though.
For instance, banks certainly covered themselves on self certified by charging higher rates of interest. I know, I had one.
Edit: in general I was asked to pay a premium of about 1%. Additionally, "self certified" mortgages for the self employed also required some quite rigorous checks, such as 3 years accounts.Also, mortgage arrears are certainly not confined to the self employed, at whom self certified, in this country, was mainly aimed.
Low salaries certainly do come into the equation. Low salaries mean that in order to house yourself adequately, a higher proportion of salary goes on mortgage payments , and so leaving less for savings to cover spells of unemployment , for instance.

It is the people in a position to make decisions who need to be asked questions, not people unfortunate enough to suffer at the hands of a financial system designed for the wealthy by the wealthy.There was and is a level of financial irresponsibility among the public, of course. But it is the banks and the advertisers that fuel it.

Sometimes I do struggle to follow your line of argument.

Supposition? No, fact.

What does the bank percentage rate have to do with people deciding to take out a self-certified highly leveraged mortgage? None whatsoever.

And there were very easy ways around the so-called checks.

No, there was a trough full of 'easy' money available and people took advantage of it. Their choice. Again, no-one forced them to.

Low salaries and how much money is left for other things is irrelevant.

hands of a financial system designed for the wealthy by the wealthy. What on earth does that mean ...apart from empty rhetoric?

[Resurrection Man]

.....t's a cruel trick to play on people who are struggling to cope, as was offering credit increases.

That bit I agree with. I can't see why the Govt decided to do it that way.

And don't get too excited by being praised by the member for Amber Valley, RM

If I knew what that meant, I might get excited. Amber Valley? Is that where the Amber nectar comes from? Now, that would get me excited.

[teamsaint]

Sometimes I do struggle to follow your line of argument.

Supposition? No, fact.

What does the bank percentage rate have to do with people deciding to take out a self-certified highly leveraged mortgage? None whatsoever.

And there were very easy ways around the so-called checks.

No, there was a trough full of 'easy' money available and people took advantage of it. Their choice. Again, no-one forced them to.

Low salaries and how much money is left for other things is irrelevant.

hands of a financial system designed for the wealthy by the wealthy. What on earth does that mean ...apart from empty rhetoric?

Empty rhetoric? so who DID design the financial system? Check out assistants?
Your view of a benign banking system astonishes me RM.

The real victims of bank greed are the customers (see Cyprus) and the taxpayer. (see HBOS).

Look to the people with power. The banks allowed all those "easy mortages". It was THEIR choice.
They are at fault.You can't get a loan from a bank without their approval.

[MrGongGong]

I seem to recall a Panorama(?) programme in the early 00s on the subject of self-certified mortgages and I don't remember any mention of checks or audits on the applications by whatever issuing authority. The mortgage leverage went as high as six times supposed salary. Is there any wonder house prices went through the roof?

I had/have a self certified mortgage
if one is self employed then this was the only way of getting one
the whole point of self certification was that you don't need to show accounts with huge profits
BUT you do pay more and have to be honest about what you say
and the value of the property needs to be such that it is likely to go up ...........

If you insist that self employed people have to have profits such that they can only borrow 3 x the profit then you are effectively making it impossible for them to buy houses. I'm not sure that this has made property values go up so much ?

House prices are too high
we would all really benefit from them being much much lower ......

[amateur51]

Missing the point - AGAIN!

I made no comment regarding affordability of houses and so please stick to the point. The fact is that money was readily available for people to over-stretch themselves. Which many people did. The banks didn't force them to sign on the dotted line. Now we also have negative equity in many instances and that doesn't help the housing situation.

Not missing the point at all. If you live in a capitalist society ( I do) and you've taken on some debt (most of us have) and your housing's value keep going up (as they did, apparently for ever) then when the bank (the same bank you have your mortgage with) offers you more credit and DFS is still selling sofas at knock-down prices on your telly every night, then you sign up for more. It's not perverse, it's stupi, uit's what everyone did at the time.

But we didn't know that the banks were also playing fast and loose with the money markets, that the housing market was overheating dangerously, that banks were up to their oxters in sub-prime deals several times removed, etc etc. So when the whole bang-shoot came tumbling down in 2008, everyone (me included) was a bit ... surprised

Capisc?

Next instament after we've agreed on that

[ahinton]

Missing the point - AGAIN!

I made no comment regarding affordability of houses and so please stick to the point. The fact is that money was readily available for people to over-stretch themselves. Which many people did. The banks didn't force them to sign on the dotted line. Now we also have negative equity in many instances and that doesn't help the housing situation.

Money may indeed have been readily available for people to over-stretch themselves - but few who borrowed/s money can possibly predict with any accuracy whether or not what they propose to borrow might constitute "over-stretching" over a term that might be 25 years. In any case, not only people but many firms large and small, local authorities and countries have each over-stretched themselves. Negative equity often occurs becasue the a drop on the value of the asset for the purchase of which the funds were borrowed; were the prices of homes eventually to fall to levels that could be afforded on the basis of their relationship to average salaries, profits &c., that would be a good thing in one sense but it could also create trillions of pounds' worth of negative equity on the homes that had previously been purchased at much higher prices with borrowed funds.

[amateur51]

Indeed, don't. It is far more important to be disagreed with by the member for Willesden Green.

Because when that happens, you know you're right!

That system seems to have let you down a good few times, Simon.

[Resurrection Man]

Empty rhetoric? so who DID design the financial system? Check out assistants?
Your view of a benign banking system astonishes me RM.

The real victims of bank greed are the customers (see Cyprus) and the taxpayer. (see HBOS).

Look to the people with power. The banks allowed all those "easy mortages". It was THEIR choice.
They are at fault.You can't get a loan from a bank without their approval.

Well, we are going round in circles and so I shall refrain from posting any more on this topic.

[ahinton]

What does the bank percentage rate have to do with people deciding to take out a self-certified highly leveraged mortgage? None whatsoever.

But for some, there was no other way of borrowing and, of course, when interest rates rise (which they've not done for ages now), what might once have been an affordable loan might suddenly become unserviceable.

No, there was a trough full of 'easy' money available and people took advantage of it. Their choice. Again, no-one forced them to.

They'd not have been able to do it had lenders not made it available in the first place; no one forced lenders to do that, either.

Low salaries and how much money is left for other things is irrelevant.

Provided that you don;t have a low salary and you have enough left over, possibly! Not otherwise!

hands of a financial system designed for the wealthy by the wealthy. What on earth does that mean?

It doesn't seem too hard a concept for me to grasp so, like the Gershwin's Nice Work, I'm sure that you can get it if you try!

[Resurrection Man]

Not missing the point at all. If you live in a capitalist society ( I do) and you've taken on some debt (most of us have) and your housing's value keep going up (as they did, apparently for ever) then when the bank (the same bank you have your mortgage with) offers you more credit and DFS is still selling sofas at knock-down prices on your telly every night, then you sign up for more. It's not perverse, it's stupi, uit's what everyone did at the time.

But we didn't know that the banks were also playing fast and loose with the money markets, that the housing market was overheating dangerously, that banks were up to their oxters in sub-prime deals several times removed, etc etc. So when the whole bang-shoot came tumbling down in 2008, everyone (me included) was a bit ... surprised

Capisc?

Next instament after we've agreed on that

We seem to be proceeding along parallel universes here. In your last two or three responses, there has been nothing addressing my original points...you merely throw in more red-herrings. So like my conversation with ts, I shall refrain from contributing any more to this particular discussion.

[ahinton]

Well, we are going round in circles and so I shall refrain from posting any more on this topic.

It seems to me that you are both creating those circles and going round in them, regardless of what anyone else has to say on the subject. Ah, well...

[amateur51]

We seem to be proceeding along parallel universes here. In your last two or three responses, there has been nothing addressing my original points...you merely throw in more red-herrings. So like my conversation with ts, I shall refrain from contributing any more to this particular discussion.

So sorry to disappoint, RM

[An_Inspector_Calls]

If you insist that self employed people have to have profits such that they can only borrow 3 x the profit then you are effectively making it impossible for them to buy houses. I'm not sure that this has made property values go up so much ?

I'm not insisting anything, nor do I provide mortgages. But ONLY 3 times the profit/3 times demonstrable salary . . . any higher and I'm sure people will struggle to make payments if the interest rates go up - which they will sometime during the mortgage period.