Mortgage offers being withdrawn

Just spotted this on AAM

askaboutmoney.com/showthread … post611820

I would expect we’ll see more of this in the coming months

I’d be delighted if this happened.

Go to the seller and explain…

My bank was going to lend me 380K and I had a 20K deposit, so that’s why I offered 400K.

Now the bank will only give me 360K, I still have the 20K deposit so I’m lowering my offer to 380K. Sorry I have to do this, I understand if you don’t want to proceed.

I expect in the current climate a lot of sellers will take the sale, and the buyer will be paying interest on 20K less debt.

Thankyou Mr Banker.

-Rd

With 20k deposit the bank will only offer you 180k based on a 90% loan.

I Told Ye Soo earlier this month

thepropertypin.com/viewtopic … t=freefall

I have heard another amusing story about our banks, they are currently formulating their "skin in the game rules " you see.

The skin in the game will be the 10%-20% of the purchase price they wish to ‘pre-process’ before they actually give you the loan.

At least one bank is about to offer TopUp mortgages to the parents of the FTB cohort except that the parent will furthermore HAVE to deposit this topup forthwith with this bank so that their offspring can count the 10-20% of the intended purchase price as skin.

I have recently heard that they are rowing back from 80% and are looking at funding 85% mortgages now . 92-95% is for the chop and even 90% looks a bit fruity .

This makes me VERY nervous.

I recently signed contracts to sell my house. Not closing for a couple of weeks.

Any chance this sort of stuff could scupper my sale?

Not if the purchaser had accepted the banks offer in writing (normally) , in that case it stands for maybe 3 months so get your solicitor to hustle them a bit to complete. within that time .

Thanks for that.

Completion is in a couple of weeks, so I should be fine?

I think that if 2pack is right about the banks and there procedures in the coming months.We will be then entering into a downturn/recession (in the eyes of the general public and the VI’s will have to admit it).It will take a while for it to sink in but when it does alot of people are going to get a sharp bolt.
People in this country only know the good times ,well the under 35 group.Everyone has credit cards,car loans overdrafts,debit cards,mortgages etc there not ready .Jobs where always plentiful ,credit easy to get.
So many people I know are already up to the eyeballs in lifestyle debt .That its hard to break bad habits
If house prices fall it a good thing for me I just handed over the keys to by house to its new owners ( cannot believe how lucky I’m)

But there is a reason they are falling I keep telling myself this country is going to start going backward very soon ,very quickly.
I have read previous posts here about basic money matters , that it should be taught in school because there is a lot of smart people but when it comes to budgeting money,logic goes out the window
Ireland is entering a new era-The banks have stopped playing monoploy,there playing cash only now
The Irish are not ready for this

This one might cause a bit of healthy debate.
Q. Is it better for Irish banks to get the price of property closer to what the IMF would consider normal for us so that they can flog on the mortgage packages easier internationally? Would it help their overall rating?
I’m wondering coz if they have already fallen foul of the international banking scene, repeating the issue will not get them any upgrades but over a few years if the packages were a lot safer due to lower risk lending conditions and smaller multiples, it might be the first foot on the ladder (sorry couldn’t help that one) to getting some credibility back.

Any thought?

This and the bridging loan post (earlier this week?) are very very significant pieces of news…, the most significant of the last year, assuming they are both true :slight_smile: (I dont doubt you 2pack)

The banks have been forced to shout stop… it had to happen once it became clear the credit crunch wasnt going away… they cant take on more risk, or they go the way of Northern Rock… Even though they know this will absolutely hammer house prices for anyone who has to sell.

If some kind of proof can be established, it should be front page news on every newspaper tomorrow. Anyways it will filter through the mainstream news when houses that were thought to be sold fall through but that’ll take say 2 months.

This is the moment when denial is no longer tenable, the people who were buying at those prices had the rug pulled from under them by the banks (actually have been done a favour)

Can you imagine being in the situation right now where u have a bridging loan and are waiting for the completion of your original house sale…
Stress!

Yes but No and yet Yes! 8)

In principle a securitisation of good credit from a well functioning economy is easy to do. There are punters out there who will buy it . So thats the yes.

The NO! is Seasoning explained Heresomewhat .

A 2008 securitisation, based on past trends, would be a package of loans that had performed for a while , average about 18 months. If our lot were securitising tomorrow the loans themselves would date back to *2006 * and we ALL know what happened in 2006 and since.

Therefore the underlying asset value would surely be less than the securitisation which begs the question .

**Where is the security here …exactly ??? **

Not yet. There have been no defaults that I know of !

Again right track but wrong dates , I am being a tad presumptious in assuming that what you mean is 'when will it start again ? ':slight_smile:

Once prices stop falling and stabilise , thereby affecting the quality of the underlying security we will be into 2010/2011 .

Securitisation of THAT product will start 18-24 months AFTER that , meaning 2012-2103 .

2006-2007 product will be securitised in time but only a lunatic would buy it until its seasoned 3 years …given the circumstances …namely

  1. Prices dropping faster than mortgage …a 90% mortgage in 2006 would not drop as fast as the price of the house since
  2. Uncertainty over incomes , unemployment .

Therefore 2008 and 2009 will see very few securitisation issues as the seasoning quality must improve over a 2006 or 2007 seasoned issue and on top of that we will see very little lending in those years as there is no securitisation ongoing .

This is one important reason why a short sharp correction is better than a long drawn out degradation of the underlying asset quality leading in turn to less lending right out into the next decade .

Modern Banks need the option of securitisation in order to churn their loan book, shame they churned it on a silly property bubble but other countries did the same .