Especially for those that "Help to Buy" will callously leave behind..

Magellan Homeloans will offer mortgages of up to £400,000 to people who have had county court judgments, individual voluntary arrangements (IVA) or even bankruptcy orders against their names. But borrowers will be charged interest rates starting at 8.55% compared to current "best buy" rates of as little as 1.5% on conventional loans.

Magellan is the brainchild of Matt Gilmour, who previously ran sub-prime lender Unity Homeloans, a joint venture with South African bank Investec, which was one of the earliest casualties of the financial crisis. Unity also offered "self-certification" loans of up to £1m, but the company was dissolved in 2009.

• Sub-prime mortgages re-emerge in wake of Funding for Lending scheme

[Thatcher's Legacy] We want to own land! Give us money!

From The Guardian:

The level of fraud on mortgages and insurance policies has more than doubled since the start of the credit crunch, and the ongoing squeeze on household finances is likely to lead to more cases, a credit reference agency has claimed. Figures from Experian show that although the total rate of fraud on financial products has fallen since 2007, in certain areas there have been big increases in the number of false applications.

Its data shows that the rate of mortgage fraud increased to 38 cases in every 10,000 applications in 2012, up from 35 the previous year, and more than double the 18 cases per 10,000 recorded in 2007. Nine in 10 cases involved individuals painting a knowingly false picture of their personal circumstances on an application, with the most common action being an attempt to hide a poor credit history. False statements about the applicant's employment status or financial circumstances also featured.

Experian said mortgage fraud cases were highest among the social group made up of middle-aged, middle-class, and skilled working-class individuals.

The freedom to say that two plus two make four.

From the BBC:

US house prices began falling again in August after the expiry of homebuyers' tax credits, a survey suggests. Prices were down 0.3% versus the previous month, on a seasonally-adjusted basis, according to the Case-Shiller index of 20 major US cities...

A tax credit for homebuyers expired in April, leading to a steep drop in home sales over the summer. That same effect now appears to be feeding into house price data, which are published with a two-month lag.

Fair enough.

1. That Homebuyer's Tax Credit was [up to] $8,000 for first time home buyers and $5,000 for repeat home buyers, a sort of negative Stamp Duty Land Tax. I've no idea how long 'chains' are in the USA, but let's call it three, so for each transaction, the total amount of the credit would be [up] to $18,000. Let's also not forget that the two nationalised lenders "own or guarantee about half of all U.S. mortgages, or nearly 31 million home loans worth more than $5 trillion", and IIRC are responsible for about 80% of new lending.

2. It's quite reasonable to expect all these direct or indirect subsidies to lead to an increase in the number of buyers and movers, and thus the number of transactions and, most importantly, the prices paid, and most articles I've seen seem to take this as a given.

3. So would it not be fair to say that the value of these subsidies accrues mainly to people who are selling housing, rather than 'helping first time buyers onto the property ladder'? (Cue Dearieme's quote). What the first time buyer gains on the subsidy swing he loses on the price roundabout.

4. If that is true (which it is), is it not also fair to say that withdrawing all these subsidies would actually help first time buyers: prices would fall by the value of the subsidies, but on the other hand, they would have a smaller mortgage to pay off and a slightly lower income tax burden in future (all those subsidies have to be paid for, and the higher government debt will have to be paid off sooner or later)?

5. Once we've gone that far, is there any reason to assume that continually reducing the subsidies until they were negative, i.e. a tax on home ownership, would not affect first time buyers either, and in a subtle way, make them better off in future?

Just askin'.

Not sure whether to laugh or cry...

From The Shields Gazette:

The last Government calculated a general mortgage interest rate for the [subsidy for mortgage interest for low income households], based on the Bank of England's base rate, plus one per cent. This was fixed when the base rate was high and stands at 6.08 per cent. But because the base rate has since plummeted to 0.5 per cent, the Government is lowering the [Support for Mortgage Interest] to 3.63%. The Department of Work and Pensions said the SMI was never intended to pay off any of the capital, just the mortgage interest.

A 78-year-old, from South Shields, who does not wish to be named, is now worried she'll lose her home. She said: "I haven't dared work out how much extra money I will have to pay just yet – I'm scared to. I only got the letter on Tuesday, saying what was happening, everything is going so quick.

"I don't know where they expect me to get the extra cash from, I'm cutting it fine as it is with my pension payments. I really am concerned that I'm going to end up losing my home. It's not as if anyone will want to employ someone of my age."

She's 78 and she still has a mortgage? Or did she take out a second mortgage very late in life?

Is this really such a good idea?

"Spreading your mortgage over 35 years"? Did I read that correctly? Click to enlarge:

Outbreak of commonsense in The House of Representatives!

Woo hoo!

228 good men and true (and women, obviously) refuse to approve lunatic $700 billion dollar corporate subsidies, aka "Fed bail out"!

Interestingly, a large majority of Democrats voted Yes and a large majority of Republicans voted No.

OK, that's not what the linked article says, because that's from half an hour ago. Try this one.

Mortgage broker joke

Broker 1: "Things are terribly quiet, aren't they?"

Broker 2 "Yup. The number of new mortgages being taken out is only about one-third of the long-run average, I read it in The Telegraph recently"

Broker 3: "Bloody hell! If this goes on any longer, the number of new mortgages will go negative!"

Lies, damned lies and statistics (2)

Twats, honestly.

"A BBC investigation has found sub-prime mortgage lenders who give loans to people with bad credit records account for more than 70% of all repossessions"...whereas ... "In the US, sub-prime loans account for just 55% of foreclosures, which are the equivalent of repossession hearings".

I have seldom seem a more cretinous use of statistics.

There could be a number of reasons for this; perhaps 'sub-prime' is defined differently in the UK and the USA (with hindsight, anybody who defaults was by definition sub-prime!); perhaps there are just far more non-sub prime borrowers having their homes repossessed in the USA; perhaps there are fewer sub-prime borrowers in the US; it is only absolute figures that matter anyway; if there were 10 repossessions in the UK, 7 of whom were sub-prime (AKA 'self-certified'?) then this is not much to worry about, however if there were 1 million repossessions in the USA, of whom were 450,000 were mainstream borrowers, then it's time to panic. And so on.