As I suspected earlier today, it's A Big One:
Homeowners granted mortgage holiday
Gordon Brown is to grant homeowners in financial difficulty the right to demand a two-year mortgage holiday, guaranteed by taxpayers, in a dramatic bid to underpin the housing market. The move will put about £1bn* of taxpayers’ money at risk in an attempt to stem the rising flood of repossessions as Britain enters recession and unemployment soars...
H/t Mountain Goat at HPC.
* "about £1bn"? Have they never heard of unintended consequences? Moral hazard? Thin ends of wedges? Slippery slopes? That'll soon turn into £10 bn and hence £100 bn. See also "London Olympics 2013".
Muh, Far Right
2 hours ago
8 comments:
Won't this make it even more unlikely you'll qualify for a mortgage?
What are the consequences of covering all this extra risk in terms of lenders attitude to borrowers? How many borderline bad loans will now become borderline good loans because they know they'll get a couple of years of cover?
AC1, TA, it could go either way - OT1H, banks will be even less willing to lend, but OTOH, the two year holiday will be underwritten by the taxpayer. Banks are now just government departments responsible for propping up house prices, it seems.
As the FT article says (go to HPC if you aren't registered at FT):
But the offer of support to families living beyond their means may be seen as unfair by borrowers who have planned carefully and made sacrifices to meet their financial obligations.
Where do I apply for this mortgage holiday, sounds like a great scheme, to me!
I'll be able to pay off m'credit cards.
I have an RBS mortgage already, so I'll get an extra six months free, too! Huzzar!
That Gorrden Broon - financical genius I tell ya.
...and as I have said before the clients of my business who did not get sucked into buying houses during the recent madness are now being taxed to pay for those who did. Of course Brown thinks this is 'fair'. Wanker.
I think your labels ("bastards", "fuckwits") are the most eloquent assessment.
It's basically an incentive to stop paying your mortgage. The banks will love that won't they.
Is there an actual finite limit on the amount of money that can be promised as an 'initiative' in the current circumstances?
If a billion - why not a trillion?
Do you know where it stops.
Anon, we can only assume that the gummint is gambling on people being too dumb to realise that we are already well beyond that finite limit and voting them back in in a snap election in early 2009.
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