What a RADICAL concept: tightening up on mortgages to prevent bubbles, defaults, etc. Shocking! This is the way it used to be done here too, before the rigging of Fanny May by the Pelosi/Frank/Dodd team to push home purchasing whether or not the “customer” could afford it – at ANY rate. Result: claims of helping the poor, but actually resulting in the continuing housing market bust.
Mortgage lending would be “capped” to stop borrowers taking out risky loans under radical Bank of England plans to prevent a repeat of the credit crisis, a senior official has disclosed.
Charlie Bean, the Bank’s Deputy Governor, said “direct constraints” may be needed to restrict access to credit, and that homebuyers could be forced to put down sizeable deposits before being granted a mortgage by their banks or building societies. This would mean that prospective buyers would have to put down between 10 per cent and 25 per cent of a property’s purchase price as a deposit before being able to obtain a loan.
It is the first time that a senior official has indicated that the Bank may intervene directly with new rules on so-called “loan to value ratios” to stop risky lending.
No signs of sanity on this side of the pond, with more noises in Washington about MORE easy money to “stimulate” the housing market. When will they ever learn?