Every financial bubble throughout history has always involved loose credit. Well, since the late great housing ponzi scheme is the biggest bubble in human history, it's very appropriate and expected to see the biggest and best example of loose credit ever seen on planet earth.
Here's the news from the UK today - the 125% mortgage. Go out and buy that waaayyy overpriced flat you silly kids. Don't put anything down. Heck, you don't even need great credit. Then get 25% more than you can find a corrupt appraiser to value it at, and go blow it! Hookers! Cocaine! Furniture! A new car! A trip to Dubai! Knock yourselves out.
Then of course go bankrupt, and leave someone in China holding the bag.
Party!!!
HBOS is set to introduce a 125 per cent mortgage - that means the product is worth a quarter more than the house value.
The new mortgage is set to be launched next week, however, industry experts have warned that the move could plunge some people into large levels of debt, tying them to the property for longer than they would wish.
Designed to give fist-time-buyers the chance to get onto the property ladder, the HBOS mortgage aims to offer customers more money to use on things such as stamp duty and household goods.
November 08, 2006
HBOS Bank to launch 125% mortgage. In related development, HBOS bankers suspected of massive crack cocaine use
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15 comments:
Just like any thing in excess, any addiction, it is just another nail in their coffin.
Have some more _____[you fill in the blank……. (crack, dope, hos, money)].
Don’t worry about it.
This is really sick. What kind of rate do you suppose they charge on this kind of mortgage? Who but the completely financially ignorant, or the desperate, would ever sign up for such a product?
It's like the mortgage is designed to set people up to fail - how will they be able to pay it back? And in the meantime it inflates the price of homes thereby forcing more and more new home buyers into a situation where this type of product is the only way they would be able to buy a home.
I think that's the ticket - the loan is NOT MEANT TO BE PAID BACK. The bank knows the person will go bankrupt - but they don't care because there's another sucker who'll buy the loan from them - China or a hedge fund.
"HBOS Bank to launch 125% mortgage."
This is the mortgage product that will keep the housing bubble inflated. Everyone was concerned about what might happen when trillions of dollars worth of ARMs reset on homes that are worth less than what is owed on them.
The 125% mortgage solves the problem of upside-down home owners.
A car salesman once told me, "There is an ass for every seat."
Everyone is upside down in their cars, no? SO, why not your house?
there is also a good story on uk bankruptcies from Mish
"Abbey, the U.K.'s second-biggest mortgage lender, said Oct. 31 it has begun offering individuals home loans worth five times their wages, because of continuing gains in house prices."
uk ponzi
Don't worry libtard FBs, Chuck Schumer will save you.
Typo in story speaks volumes:
"Fist-time buyers..."
They certainly will be getting reamed!
This is the kind of mortgage that just begs to be defaulted on. Borrow 1.25 million, buy a million dollar house, buy $250K in silver and gold coins and bury them somewhere and then go into default.
Well, you don't have to default on the loan, you can just rent out the house to a cult.
they're running low on idiots and dolts so they have to sweeten the deal up some.
it will be like the members of the Sex Pistols (before they got rich) going in on a "mates mortgage" for 125% cash back at closing mortgage on their new digs - like they're really going to sweat it much when they default - yeah right. and the place will be unfit for human habitation after they've been foreclosed upon and evicted.
you reap what you sow but whoever is holding the bag with this giant turd enclosed is not going to be happy when the eventual default happens. rates are going to explode, credit's going to tighten up (it should). the one thing that these UK banker geniuses don't seem to get is that if a lot of this junk is held by foreign investors and governments, wars and civil unrest can break out over this kind of massive default (should it occur). somebody PLEASE start requiring broker reserve accounts.
Smug Bastard
This is the kind of mortgage that just begs to be defaulted on. Borrow 1.25 million, buy a million dollar house, buy $250K in silver and gold coins and bury them somewhere and then go into default.
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exactly, Why rob a bank for a few thousand when you could just take out a 125% mortgage. you'll be long gone before the bank finds out.
This is really sick. What kind of rate do you suppose they charge on this kind of mortgage? Who but the completely financially ignorant, or the desperate, would ever sign up for such a product?
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Agreed Paul E. Math, who in their right mind would even consider this propaganda...but desperate people do desperate things sad but true
Why on earth would anyone sign up for such a terrible loan? Aren't home prices in the UK ridiculous already. Why drive them higher? Is this type of loan available in Canada?
I gotta find some place to bury my $250K in gold and silver coins.
Kweefer, where do you hide your precious metals? I assume that during the Greater Depression the government will confiscate peoples' supply of gold.
"Designed to give fist-time buyers the chance to get onto the property ladder ..."
I'm sure that was a typo but "fist time" does sound so rectally appropriate.
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