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+--- Thread: Government warned for 3 years lending changes would create issues (/showthread.php?tid=1030)
Government warned for 3 years lending changes would create issues - Wainuiguy - 18-01-2022
https://www.nzherald.co.nz/nz/politics/government-had-three-years-of-warnings-new-credit-rules-would-shut-out-borrowers/HTITLDDOCL4ENX4NZAVFY2LBAE/
Once again they ignored all the warnings (Kiwibuild anyone?) But proceeded to make the changes and made other changes not in the initial proposals.  Now they will investigate if banks have misinterpreted the law - no chance they just created a bad law though huh?
RE: Government warned for 3 years lending changes would create issues - Oh_hunnihunni - 18-01-2022
Couldn't possibly be the banks application of the law at fault I suppose? Banks being such creatures of probity and straightforwardness...
RE: Government warned for 3 years lending changes would create issues - Wainuiguy - 18-01-2022
(18-01-2022, 09:11 PM)Oh_hunnihunni Wrote: Couldn't possibly be the banks application of the law at fault I suppose? Banks being such creatures of probity and straightforwardness...And yet those same banks told them about issues.  Many others in the know are saying it is a bad law change.  Once again trying to help those they "care" about they create worse issues.
RE: Government warned for 3 years lending changes would create issues - Oh_hunnihunni - 19-01-2022
And who do the banks care about?
RE: Government warned for 3 years lending changes would create issues - Oh_hunnihunni - 19-01-2022
https://www.stuff.co.nz/business/300498519/nonbank-mortgage-lender-says-it-wont-nitpick-over-how-many-coffees-you-have
RE: Government warned for 3 years lending changes would create issues - Praktica - 19-01-2022
On one hand, national supporters complain about high house prices making it difficult for buyers, and on the other hand they complain when government action leads to a tightening of credit and a drop in the market. What can we deduce from this?
RE: Government warned for 3 years lending changes would create issues - Magoo - 19-01-2022
whineys got this.
the banks make money from lending. they want to lend.
when they see laws that might inhibit their capacity to earn they speak.
my daughter brought a property two years ago that she probably wouldnt qualify for today.
so again its the bottom end of the market being restricted even though they arent the ones driving up the prices.
its hard to get a good credit history when no one can give you credit.
its easy to buy more houses when youve got a house, and the interest rates are cheap.
this is a catalyst, one of many that stem from over regulation of the entire process.
most markets operate more efficiently under laisses faire policy.
RE: Government warned for 3 years lending changes would create issues - Oh_hunnihunni - 19-01-2022
Should housing though be a market driven issue that leaves many people without access to safe housing, while others can invest and hoard?
RE: Government warned for 3 years lending changes would create issues - Magoo - 19-01-2022
(19-01-2022, 08:16 AM)Oh_hunnihunni Wrote: Should housing though be a market driven issue that leaves many people without access to safe housing, while others can invest and hoard?no, it should not. and what we have now is not market driven, its legislation and regulation driven.
were the market not tinkered with it would respond to normal supply and demand like other markets, not just demand.
RE: Government warned for 3 years lending changes would create issues - king1 - 19-01-2022
This just seems to me like the banks flexing their collective muscle because the new rules don't favour banks.
RE: Government warned for 3 years lending changes would create issues - Magoo - 19-01-2022
(19-01-2022, 08:37 AM)king1 Wrote: This just seems to me like the banks flexing their collective muscle because the new rules don't favour banks.nor do they favour borrowers...so who wins?
RE: Government warned for 3 years lending changes would create issues - king1 - 19-01-2022
(19-01-2022, 08:45 AM)Magoo Wrote:the borrowers who are restricted from getting too far into debt perhaps...(19-01-2022, 08:37 AM)king1 Wrote: This just seems to me like the banks flexing their collective muscle because the new rules don't favour banks.nor do they favour lenders...so who wins?
RE: Government warned for 3 years lending changes would create issues - Magoo - 19-01-2022
the borrowers who cant borrow will never get into debt, that is true.
but its not the debt that gets you, its the repayments.
your asset is of ne less value from your inability to maintain the loan.
RE: Government warned for 3 years lending changes would create issues - Oh_hunnihunni - 19-01-2022
(19-01-2022, 08:45 AM)Magoo Wrote:Oh puhleeze!(19-01-2022, 08:37 AM)king1 Wrote: This just seems to me like the banks flexing their collective muscle because the new rules don't favour banks.nor do they favour lenders...so who wins?
If our rules did not favour lenders we wouldn't have so many foreign banks sending vast profits home to their shareholders.
RE: Government warned for 3 years lending changes would create issues - Magoo - 19-01-2022
(19-01-2022, 09:13 AM)Oh_hunnihunni Wrote:meant borrowers.(19-01-2022, 08:45 AM)Magoo Wrote: nor do they favour lenders...so who wins?Oh puhleeze!
If our rules did not favour lenders we wouldn't have so many foreign banks sending vast profits home to their shareholders.
RE: Government warned for 3 years lending changes would create issues - reigns - 19-01-2022
(19-01-2022, 08:55 AM)Magoo Wrote: the borrowers who cant borrow will never get into debt, that is true.
but its not the debt that gets you, its the repayments.
your asset is of ne less value from your inability to maintain the loan.
The repayments are calculated on the debt. If the mortgage I had to take out for the house I bought almost a year ago was half of what it is now, interest rates could jump to 10% and still be less than what I'm paying right now. At 15% it'd be about the same. If it jumps to 10% now, we'd be stretched financially. 15% and we'll have no choice but to sell the house.
The total cost still ends up being me paying back 2x what I borrowed - regardless of whether it's $500k or $225k. The total being the difference between the bank getting half a mil back, or a whole million over 30 years.
Banks made billions in profit still during the pandemic while plenty of households and small-to-medium businesses suffered. I don't own a microscope small enough to find the tiniest violin in the world to play for the banks' sad feelings about having to forecast for less profit.
"But other parts of that law change, designed to ensure that lenders were lending to people who could afford the sums of money they were borrowing, have apparently been too restrictive."
So banks have to offer people lower mortgages than they would otherwise offer, meaning that buyers come into auction rooms or enter negotiations with less money, meaning sellers have to adjust their price expectations based on what people can actually afford?
I'm not seeing a problem here.
Banks only lose out on having a bigger profit on the mortgages they lend; otherwise they wouldn't lend money at all. The only "losers" here are those selling their houses, but given that house prices have been on a merry fucking gallop ever higher and higher.. The only true losers would be sellers who have bought recently and are selling. That *could* be me if circumstances change and it wouldn't be awesome but.. if the market realigns to be better in sync with peoples' incomes rather than what banks feel comfortable giving away, then the market I have to buy back into is far less shit.
The only spanner in the works here is property investors who hoard houses like fucking gremlins. If Christchurch has proven anything, it's that "MORE SUPPLY" means you end up with investors flocking to that market to snatch up the bargains, which end up driving prices up. Making houses cheaper is a good move but the Government has to do something about restricting investors if it truly wants to help out young Kiwi families and first home buyers.
RE: Government warned for 3 years lending changes would create issues - SueDonim - 19-01-2022
(19-01-2022, 07:31 AM)Magoo Wrote: whineys got this.
the banks make money from lending. they want to lend.
when they see laws that might inhibit their capacity to earn they speak.
my daughter brought a property two years ago that she probably wouldnt qualify for today.
so again its the bottom end of the market being restricted even though they arent the ones driving up the prices.
its hard to get a good credit history when no one can give you credit.
its easy to buy more houses when youve got a house, and the interest rates are cheap.
this is a catalyst, one of many that stem from over regulation of the entire process.
most markets operate more efficiently under laisses faire policy.
It seems that the banks have been hamstrung by the silliness of the new laws. Being sure of your identity and that your deposit has come from legal sources is fine. But to tell mature people with a small mortgage that they can't add to it to rebuild their unsafe deck is ridiculous. As is insisting that a pregnant woman must go back to work within 90 days of giving birth. Both articles I've seen in the last week.
Financial transactions should be business-like and straightforward. Your income is "$x" so you can afford to borrow "$y" and the equity you have to cover the loan is $z. If the equation works you should get the money. If not you don't. And if your circumstances change so that you can no longer afford it, then you know you have to sell.
It's actually no easier to buy more houses when you already have one. It used to be, but those days are gone and it's now much harder than it was. That's part of why there's such a shortage of rentals, which are needed more than ever because people can't get mortgages. And so the circle goes around.
RE: Government warned for 3 years lending changes would create issues - Magoo - 19-01-2022
my bank is falling over its feet to give me money
but i have no mortgage or debt, that might be a factor.
RE: Government warned for 3 years lending changes would create issues - SueDonim - 19-01-2022
(19-01-2022, 09:28 AM)reigns Wrote: The only spanner in the works here is property investors who hoard houses like fucking gremlins. If Christchurch has proven anything, it's that "MORE SUPPLY" means you end up with investors flocking to that market to snatch up the bargains, which end up driving prices up. Making houses cheaper is a good move but the Government has to do something about restricting investors if it truly wants to help out young Kiwi families and first home buyers.
Property investors have been baling out big time in case you haven't noticed. The government has hit them every way it can so many have simply given up. So what you have left is a shortage of rental properties driving rents up. The one thing that is in their favour is that the government has also driven house prices sky high so that selling has become even more attractive.
Bargains can only be snapped up if they are there. If there's a potential owner-occupier at an auction they will always over-bid investors.
RE: Government warned for 3 years lending changes would create issues - Praktica - 19-01-2022
(19-01-2022, 09:56 AM)SueDonim Wrote:Where do these sob stories come from, and how representative are they of peoples' experience? Why is this campaign being run now? Are some with a lot of vested interest in high property prices fearing a drop in their income?(19-01-2022, 07:31 AM)Magoo Wrote: whineys got this.
the banks make money from lending. they want to lend.
when they see laws that might inhibit their capacity to earn they speak.
my daughter brought a property two years ago that she probably wouldnt qualify for today.
so again its the bottom end of the market being restricted even though they arent the ones driving up the prices.
its hard to get a good credit history when no one can give you credit.
its easy to buy more houses when youve got a house, and the interest rates are cheap.
this is a catalyst, one of many that stem from over regulation of the entire process.
most markets operate more efficiently under laisses faire policy.
It seems that the banks have been hamstrung by the silliness of the new laws. Being sure of your identity and that your deposit has come from legal sources is fine. But to tell mature people with a small mortgage that they can't add to it to rebuild their unsafe deck is ridiculous. As is insisting that a pregnant woman must go back to work within 90 days of giving birth. Both articles I've seen in the last week.
Financial transactions should be business-like and straightforward. Your income is "$x" so you can afford to borrow "$y" and the equity you have to cover the loan is $z. If the equation works you should get the money. If not you don't. And if your circumstances change so that you can no longer afford it, then you know you have to sell.
It's actually no easier to buy more houses when you already have one. It used to be, but those days are gone and it's now much harder than it was. That's part of why there's such a shortage of rentals, which are needed more than ever because people can't get mortgages. And so the circle goes around.