Quote:
Originally Posted by Herr-Berbunch
In this country you didn't used to be able to get a mortgage for more than (IIRC) two-and-a-half times your annual salary as a couple, or three times as an individual.
So if I earnt £25k (which I did years ago, but don't now) I could've got a mortgage for £75k on my own.
Then came along self certification (under Labour for those interested!) and if I saw a house for £130k all I had to do was pretend to make £44k. As long as I could afford the initial repayments they offered - I was in a nice new abode worth almost double what I could've got a few years previously.
Then the interest rates would rise, other bills would rise, and hey-ho, I'd expect someone to come and help me out. That'd be you, the taxpayer! Why should my family and I lose out on this lovely home because somebody made me lie on a mortgage application form? Oooh, you've dropped interest rates, how kind, thank you banks. Sorry savers.
The above is all ficticious, I've never owned a house, or had a desire to, but I just think that those that lied should get their comeuppance!  |
It was much the same here. People had the attitude that "hey the lender knows what they're doing, they wouldn't loan me the money if I couldn't repay it." But the lenders never cared about the loans being repaid. They sold them off to the securitizers on Wall Street to be packaged into garbage securities.
I would go so far as to say the number of loans made that don't rely on income verification and take the borrower's word for it should be a number around zero.