Banks say 'no' to 80pc of requests for loans - Indo

Door, horse, bolted!

If we had had prudent lending for the last 10 years, where would the country be now?

A much better place I’d say…

Banks say ***‘no, we don’t have any money to give you’ ***to 80pc of requests for loans.

There, fixed that for you. :angry:

So this is what happens when you start reapplying mortgage standards.

Unaffordable housing

  • Increased unemployment
  • Increased under-employment
  • Decreasing wages/salaries
  • Increased income taxes/levy
  • Impending property tax
  • Increased uncertainty
  • Restricted Lending
  • Slightly reduced prices of general goods and services

= Way way way cheaper housing

70-80% cheaper based on peak 2006 average. While I didn’t believe this at first due to my own cognitive dissonance I’m beginning to understand why this will happen. My emotions, even logical emotions, say this won’t happen. Raw unclouded logic says otherwise. Everything and I mean everything is in place now for this to happen.

  1. We now require a half-decent deposit
  2. We are limiting loans to a sensible multiple of income
  3. We don’t believe property valuations
  4. Apartments? Ugh!
  5. We don’t have any money to give you anyway
  6. Could I interest you in a high-rate deposit account instead…Ah,sure, go on…there’s a free leather wallet and pen!

There really is only one slant to be put on this - 80% of people who apply for mortgages are unsuitable. 20% of people fail to meet the preconditions (e.g. not between 18 and 65 years old, not in permanent employment for 2 years (or 3 years self employed accounts), 20% have jobs which, while meeting the preconditions, are deemed too high risk e.g. plasterer, shop assistant, presumably the other 40% have other problems such as credit rating, too high other debts, don’t earn enough for what they want to borrow, are trying to pay too much for the property, don’t have an adequate deposit etc. Then there are 20% of people who are good credit risks with a nice deposit looking to buy a realistically priced home. To be honest, I’m surprized that 20% of applicants fall into this category, but I’m not surprized that 40% of people fail the employment and/or basic criteria. People who don’t deserve loans don’t get them, that’s not news. In saying that, if I applied for a mortgage I probably wouldn’t get one at the moment.

A shocking 99% of toddlers are not tall enough to ride Roller Coasters.
Action groups lobby for lowering of “You Must Be This Tall” signs.

“It’s just not fair, last year they let everybody ride, nobody cared what height you were.
Yeah, sure, some babies fell out and were killed, but everybody knew the risks, we’re all
adults here, well except for…you know…the toddlers. Anyhow, enforcing these height
restrictions just spoils everybody’s fun.”

-Rd

I’m always a little wary of sample bias. This is another group that I’ve never heard of popping up with some headline making research.

I got this from their sparcely populated website.

selectmortgages.ie/about.php

I hope this isn’t their sample base. :unamused:

Looks like another piece of crack Indo reporting.

A good metaphor.
But you forgot the bit where the rollercoaster and tracks are coming apart and the caretaker (lenihan) is patching them up on a daily basis.

Reminds me of my old trips to funderland.
It wasn’t the rides that made me scream, but watching the nuts and bolts rattle and vibrate like crazy as it spun around.

Have a wander over to AAM. Plenty of stories there about people borrowing 6 or 7 times their salaries on 35 year mortgages.

Fair play to them if they can get it.
Got to fill those boots while the gittin’ is good.
I see absolutely no downside to this at all.

-Rd

I think it’s quite likely the banks are still funding mortgages with ridiculous salary multiples it’s just that they have a lot less money with which to do it hence the rejection rate.

Don’t forget folks even in these dark days people still hand over 40% of their income for a shoebox. The Irish market hasn’t changed, only the inputs into it.

I have said it before but it 'bears ’ repeating .

Most mortgage lending is drawn from a pool of €1bn each ringfenced within AIB and BoI for FTB buyers. The IT reader is not an FTB .

On the generous assumption that the €1bn each (€2bn) is used to fund an average FTB mortgage of €200k that means that those two banks can fund 10,000 FTB purchases before they completely run out of money and try to tap Brian for another few billion .

10,000 properties is nothing . 50,000 leave school every year at leaving cert time and if we assume they all pair off before they get a mortgage we can surmise that 25,000 new households are created each year .

Country Tom and De Members are sitting on 40,000 unsold new shoeboxes and exurb housheens . It will take them years to get rid of them at this rate .

The FTB funding pool will fund less than half the average domestic household formation rate in one normal year …never mind immigrants .

I reckon the BoI and AIB FTB mortgage pools will be exhausted by around March 2010 . After that NOBODY will be able to get a mortgage .

Naturally, house prices will rise rapidly once nobody anywhere can get a mortgage 8)

What the hell is this?

He had to fill out forms? Boo Hoo.
He had to provide Accounts. Of course he bloody did, he’s self employed in a recession.
They needed wifey’s pay slips for 6 months. Of course they bloody did, she’s married to a self employed guy in a recession.

What do these people want? Do they want to walk into the bank and find a special shelf stacked with wads of 50 euro notes, specially for customers with 20 years history with the bank?
“Go on help yourself, we know you’re good for it.
No, no need to tell me how much you took, sure you’re with us 20 years.”

Tabloid Crap.

-Rd

I don’t know lads. Just spoke to a guy at work this morning. He wanted to build a house on family farmland and everything was looking fine (planning granted, mortage approval) until his fiancee lost her job. They told the bank (AIB) that they didn’t want to draw anything down yet but the bank were pressuring them to draw down the original mortgage despite their combined earnings taking a considerable hit.
They are being more prudent than the bank!

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