{"id":3049,"date":"2010-09-28T21:42:34","date_gmt":"2010-09-28T20:42:34","guid":{"rendered":"http:\/\/politics.widmann.org.uk\/?p=2855"},"modified":"2010-09-28T21:42:34","modified_gmt":"2010-09-28T20:42:34","slug":"lending-to-people-who-cant-prove-they-can-repay-it","status":"publish","type":"post","link":"https:\/\/widmanniana.org\/blog\/lending-to-people-who-cant-prove-they-can-repay-it\/","title":{"rendered":"Lending to people who can’t prove they can repay it"},"content":{"rendered":"
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\nSold on Open Day<\/a>
\nOriginally uploaded by Thomas Guest<\/a>
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I was reading an article in MoneyWeek<\/a> when one sentence leapt out at me:<\/p>\n

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[The Financial Services Authority (FSA) report into the mortgage market that lays out plans to outlaw self-certification mortgages] is a shocking report. Not because it wants to ban self-cert \u2013 clearly it is ludicrous to lend money to people who can’t prove they can repay it […]<\/p>\n<\/blockquote>\n

It might sound obvious to the author of the article that people should be able to prove their ability to pay, but isn’t it ludicrous to think you can prove this?<\/p>\n

A typical mortgage will have to be repaid over a long time, e.g., 25 years. There are only two ways in which you can prove your ability to pay: Either you have the money already (but then you wouldn’t need the mortgage in the first place), or you have a guaranteed income in a job you cannot lose.<\/p>\n

Until fairly recently, there were many jobs that practically were for life, but these days real job security is the exception, not the rule.<\/p>\n

In other words, the only thing people can prove is their current income, not their future earnings.<\/p>\n

Giving mortgages only to people that currently have a job but not to those who are self-employed or who have just started up a company seems ludicrous. Anybody with a job can be out of it tomorrow, while self-employed people will typically be more in control of their own destiny.<\/p>\n","protected":false},"excerpt":{"rendered":"

Sold on Open Day Originally uploaded by Thomas Guest I was reading an article in MoneyWeek when one sentence leapt out at me: [The Financial Services Authority (FSA) report into the mortgage market that lays out plans to outlaw self-certification mortgages] is a shocking report. Not because it wants to ban self-cert \u2013 clearly it is ludicrous to lend money to people who can’t prove they can repay it […] It might sound obvious to the author of the article that people should be able to prove […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[99,159,130],"tags":[],"class_list":["post-3049","post","type-post","status-publish","format-standard","hentry","category-economics","category-en","category-politics"],"_links":{"self":[{"href":"https:\/\/widmanniana.org\/blog\/wp-json\/wp\/v2\/posts\/3049","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/widmanniana.org\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/widmanniana.org\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/widmanniana.org\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/widmanniana.org\/blog\/wp-json\/wp\/v2\/comments?post=3049"}],"version-history":[{"count":0,"href":"https:\/\/widmanniana.org\/blog\/wp-json\/wp\/v2\/posts\/3049\/revisions"}],"wp:attachment":[{"href":"https:\/\/widmanniana.org\/blog\/wp-json\/wp\/v2\/media?parent=3049"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/widmanniana.org\/blog\/wp-json\/wp\/v2\/categories?post=3049"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/widmanniana.org\/blog\/wp-json\/wp\/v2\/tags?post=3049"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}