Lending rules to be tightened up

[BrilloPad]

Lending rules to be tightened up

http://news.bbc.co.uk/1/hi/business/8312900.stm

The Financial Services Authority will make banks liable for loans if they do not check customers can afford them.

Why cant people decide first if they can afford them or not? If they cant afford them then dont take them out.

Maybe everyone should be wrapped in cotton wool......

[BrowneIssue]

Why cant people decide first if they can afford them or not? If they cant afford them then dont take them out.

Because it is very difficult for a first-time buyer who sees houses at £400,000 and being told by an Estate Agent & mortgage lender that "Yes, you'll be able to afford this" to not be fleeced.

Working out household finances, tax, benefits, allowances, predicting childbirths, predicting future salaries, future interest rates and being able to tell when an Independent Financial Advisor is a lying bastard are all not straightforward.

I got shafted with two endowment policies.

I ended up cold and hungry trying to pay the mortgage when the Tories decided 16% was OK as an interest rate.

I had 50% negative equity when the Tories finally cleared off.

I had seven successive years of bonuses and commendations when I was laid off from my final permie job.

I didn't predict any of those and they all affected my ability to pay back the mortgage and none were under my control.

The only thing that was under my control was ensuring the initial payments were achievable, which they were. Initially.

[Doggy Styles]

Why cant people decide first if they can afford them or not? If they cant afford them then dont take them out.

Maybe everyone should be wrapped in cotton wool......

People deciding for themselves is what got us into the mess we are in.

[BrilloPad]

I have also been shafted in my time. Its part of learning.

Maybe they should re-introduce debters prisons to make people more wary of taking on debt.

Why cant people live within their means? Its only basic Thatcheromics.

[Doggy Styles]

Why cant people live within their means? Its only basic Thatcheromics.

Because people have been changed by 12 years of Brownonomics, which is the opposite.

[BrilloPad]

Because people have been changed by 12 years of Brownonomics, which is the opposite.

I look upon it more as (Vivienne)Nicholsononomics.

[Doggy Styles]

I look upon it more as (Vivienne)Nicholsononomics.

Good point, although she spent money she actually had.

Then again, it was money she was gifted...

[AtW]

The Financial Services Authority will make banks liable for loans if they do not check customers can afford them.

Well, banks are supposed to be liable for loans in the first place - if they go bad they'd lose money. Problem is that with house prices always raising they think they can't lose money.

The solution is to make bank put more money aside on a zero interest BoE account for each pound they lend to consumers when it exceeds set threshold, ie: 3 times salary for house should have low reserve ratio, anything considerably above will make bank set aside a lot of capital.

[minestrone]

Lending rules to be tightened up

http://news.bbc.co.uk/1/hi/business/8312900.stm

The Financial Services Authority will make banks liable for loans if they do not check customers can afford them.

Why cant people decide first if they can afford them or not? If they cant afford them then dont take them out.

Maybe everyone should be wrapped in cotton wool......

Depends on what your definition of thick is but really about 40% of the population is thick.

The personal resonsibility option would never work, someone has to step in and say doing 70 mph in your car is wrong outside a school and giving ex convicts firearms is not a smart idea.

Most laws are there to stop stupid people doing stupid things, people with brains do not need laws, sadly the country is formed and shaped by the lowest.

[BrilloPad]

Well, banks are supposed to be liable for loans in the first place - if they go bad they'd lose money. Problem is that with house prices always raising they think they can't lose money.

The solution is to make bank put more money aside on a zero interest BoE account for each pound they lend to consumers when it exceeds set threshold, ie: 3 times salary for house should have low reserve ratio, anything considerably above will make bank set aside a lot of capital.

Thats a great solution : until the banks use complex instruments to move the loans off balance sheet. Rather like what happened with the credit crunch.....

Maybe less regulation is needed? And smaller banks so that if they go to the wall it does not matter so much.