Over 25% of Irish Mortgages from Subprime Lenders. UK 12%+

An article appears on Bloomberg about the 12% of mortgages that issue from lenders who do SOME sub prime. One bit made my eyes hop out .

UK subprime lenders of whom the BIGGEST is Northern Rock :open_mouth: according to this article have upped their rates today , as have our lot.

The definition of a sub prime lender is NOT a lender who only does sub prime but ANY lender who knowingly does unsound lending . I have highlighted a few bits. % figures are as a % of the total UK market .

bloomberg.com/apps/news?pid= … realestate

Now correct ole 2Pack if he is wrong.

Bloomberg consider loans of UP TO 5 TIMES INCOME to be sub prime territory . They are correct because the yanks do not go to 5x and call it prime.

By my reckoning that means that lenders responsible for at least **25% of Home Lending in Ireland are sub prime lenders because they allow 5x Income multiples …or more…in certain cases **

Bank of Ireland, EBS and IIB all allow 5x mortgages to my knowledge, there may be others.

EBS and Bank of Ireland have at least 25% of the home loan market between them.

The EBS alone has 12% of the Irish market and BoI are, as I understand, bigger.

Sub prime lendING is 6% of the Uk market and offically c.1% here but the above are not pure sub prime lenders so I am not sure how much UK sub prime is sub prime from prime lenders and how much from the likes of Start who only do sub prime.



#######WARNING - ANECDOTE AHEAD############

I once went to a prominent high street lender in Ireland, shortly after arriving on these shores in 2005. The lady ran me through her system, and then told me she was sorry, but all they would be able to extend to was 6x gross earnings.

Nearly fell off my chair.

anecdotally I have heard 10x IO on one income but I cannot finger any lender named above for it.

My sister in law was offered 5-6x on her own in 2004/2005 .

Just because it’s 5x doesn’t make it sub-prime.

Sub-prime is giving a mortgage to people who have had problems repaying in the past and may again in the future.

That’s sub-prime lending and that’s what has brought the US to it’s knees.

That and ninja loans.

I was offered just over 6 times my income earlier this year.
Whats a ninja loan?

a ninja is a lie all you want loan

No Income No Job No Assets

I do consider 5x to be sub prime by the way because that borrower cannot survive small shocks by themselves.

3-4x is the max I would consider as prime.

It’s all falling into place really isn’t it. :open_mouth:


Funny that in the US home ownership rate is less than that in Ireland, house prices are about half those in Ireland incomes are similar, GDP per capita is similar and US has fewer empty homes. Yet US lenders are the ones with problems, strange.

Lending standards were lower in the US.
You could get a loan on “stated” income rather than proven income.
Thats why there are so many foreclosures over there. Thats not going to happen here.

While this is technically correct I think it is a bit of sneaky obfuscation by the industry this side of the Atlantic.

Because we have ad hoc piecemeal credit rating system we don’t have a standard credit bureau risk score; since no one has any rating it follows that no one has a low rating and hence sub-prime does not exist.

Credit for the masses is relatively new to Ireland and the lenders have sought out people that have never had the opportunity to default before.

Next time around it will be very different.

I find it crazy too - I posted a day or two ago that Ireland was full of subprime. Its just a name - pulled from numbers. There are actually many “subprime borrowers” that are in effect prime borrowers. You know the story - young, spent too much on a student loan, defaulted on a small credit card bill. Started working after college got married, two working people with an income of lets say 110,000 dollars. They get a loan for 330000.

Just 3X combined income and they are subprime - - In Ireland they are top of the line lenders due to the 3X income stat - even with nothing down.

Anyone on interest only is Without doubth subprime. That only works as house prices rise.

but the US lenders scam their costumers big time

Ahhhh…anyone notice…

Freddie Mac exceptional bad debt losses of 320million.

bloomberg.com/apps/news?pid= … refer=home

Thing is that they don’t even touch sub-prime and are govt backed…imagine the pain going on else where when these guys are like the stwalwarts of the industry…

Not only that…lots of jobs getting well shaky on trading floors…alot of guys twiddling thumbs…not allowed to trade

Very easily.

Take it from the point of view of young professional with a good career path, perhaps even a tinge of public sector in there.

Previously there was zero difficulty because HPs were increasing and in all likelihood they would ladder and move on quickly.

Of course now, it’s so damn sticky that might not be an option.

But for the last five years, it’s been par for the course.

Let’s not be naieve here.

Note that Ross is aware of nine times income. I must say that I am bemused that he thinks that our legislators appear not to be accountable when the country is held up to ransom.

Of course he wouldn’t he is one of them, a politician at the end of the day.