Custom Search

Wednesday, July 4, 2007

Sound familiar?

Did you really think subprime was only a U.S. problem?

" U.K. lenders are selling home loans to customers who don't need them and don't always check whether a client can repay the debt, practices that may lead to "serious wider consequences,'' the U.K.'s financial regulator said. "

The industry behaved the exact same way in the U.K. as they did in the U.S. only the bubble hasn't burst... yet...

" Poor record-keeping at some mortgage brokers means they were unable to prove mortgages sold to clients were suitable, the FSA said. Some firms failed to check information they were given was believable, the regulator said. "

Want a mortgage? Got a pulse? Ok. Sign here...

" U.K. debt as a share of income touched 163 percent in the fourth quarter of last year, the highest since 1992, according to Citigroup figures. A first-time buyer can purchase a home for 3.2 times his or her annual income, according to the Council of Mortgage lenders. "

Unlike in the U.S., the Bank of England isn't even considering cutting rates...

" The bank's forecasts in May showed that four rate increases since August won't be enough to tame inflation, which has exceeded the 2 percent target for more than a year. "

" Bank of England policy makers will probably raise the benchmark interest rate for the fifth time in a year this week as Governor Mervyn King wins more support for an increase to curb inflation, a survey of economists shows. "

Source: Bank of England Will Probably Raise Key Rate to 5.75% (Update2) (http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a5Gee7E4DBAg)
Source: U.K. Subprime Lenders' Practice Is `Poor,' FSA Says (Update1) (http://www.bloomberg.com/apps/news?pid=20601087&sid=aVfG1VT3ILws&refer=home)