Banks have returned to reckless mortgage lending.

That's true.

As has been said before, though, poeple must take responsibility for their own actions.
They sign on the dotted line when borrowing the money.
Nobody is forcing them.
 
Yes, but in this case we have banks who have just been bailed out by the taxpayer who are indulging in recklesness. They have their own share of the blame to answer to.

What happened to the supposed legislation that was going to be brought in to ensure this would never happen again? I recall people on AAM saying this had already happened. Hmm.
 
People can only borrow what the banks approve.

This is up there with the barman got me drunk.

People need to wise up and take some responsibility for themselves.

I have had clients in the boom who took umbrage because I couldn't get them 6 times their salary due to the fact that they had 2 brand new car loans - it was clearly explained to them why they could not afford it - this was ignored and they usually went to an Irish building society for instant approval.

These days it's not much better, you still get people who think they have a right to a mortgage because they are on a decent salary yet have never saved in their lives and have hit their parents for the deposit.

The shoddy lenders are still shoddy, nothing has changed there.
 
http://www.independent.ie/national-...ned-to-reckless-mortgage-lending-2267944.html

Should this not read:

"House buyers have returned to reckless borrowing"?

I agree 100%! Einstein was right when he said: "Only two things are infinite, the universe and human stupidity, and I'm not sure about the former."
The fact that banks are approving such loans is not surprising in the least; that's what you get when you interfere with a company/industry that should be bankrupt.
 
I’m glad that the intelligent members of AAM are capable of free thinking & can read through sensational headlines. Well done!
 
I'd be the first one to bash idiots who took out mortages they knew they couldn't handle during the bubble.

However, the banks - who we bailed out, remember - also have a responsiblity not to get into trouble again and required further bailing out.

There's two issues here.
 
This is up there with the barman got me drunk.

Barmen, in fact, have a legal duty of care under common law to make sure that you don't get yourself dangerously drunk. Ask any publican.

Banks ought to be expected to have the same duty of care towards borrowers.
 
Barmen, in fact, have a legal duty of care under common law to make sure that you don't get yourself dangerously drunk. Ask any publican.

Banks ought to be expected to have the same duty of care towards borrowers.

with the same level of enforcement as the barmen? It only seems to happen in the movies that the barman says "...I think you've had enough sir...".
 
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Charlie Weston didn't say it but Karl Deeter singled out one particular lender. He was on Morning Ireland yesterday morning and made no qualms about what bank was beefing up the book before an inevitable sale.
If any competitior, as alluded to by the FR, wishes to follow that example then shame on them.
Having said that, people should wise up and realise that these institutions are doing them no favours.

http://www.tribune.ie/business/news...le-insanity-reigns-as-big-banks-woo-first-ti/
 
Surely the onus is on both the individual (must be realistic about what they can afford) and the banks (responsible lending). You cant just say its one fault over the other.

People need to cop on and realise that it is insane to borrow 5-10 times your salary. That being said if someone goes to the bank looking for same the banks need to just say no. Realistically if one bank says no they all should say no. They should have the same infrastructure and regulations in place
 
Isn't that the crux of problem ?
There may be guidelines in place for borrowing but there is no regulation.
 
My car will do 150 MPH.

Doesn't mean I drive at that speed.


Theres also a speed limit, the tyres have limits, and some cars have speed limiters. So it not like you jump in a car and can drive unrestricted with no warnings and not informed.
 
Surely the onus is on both the individual (must be realistic about what they can afford) and the banks (responsible lending). You cant just say its one fault over the other.

People need to cop on and realise that it is insane to borrow 5-10 times your salary. That being said if someone goes to the bank looking for same the banks need to just say no. Realistically if one bank says no they all should say no. They should have the same infrastructure and regulations in place

On the first part, oh that such wisdom prevailed a few years back. I think the base point is that consumers always need to be protected from themselves because they have proved themselves to be essentially clueless and greedy. It's that nasty 'human' factor they all possess. If 100xsalary loans are available, people will grab them up despite the "end-of-their-world" warnings that might accompany them. To stop the nonsense this is where the regulator comes in. Thanks be to god we now have a regulator with balls and brains at the moment.
 
I hate this argument. Banks deal in money and finance, it's their primary purpose. People don't, and mortgages aren't simple transactions. They go to the bank and expect them to give them what they can afford, and while that's certainly misguided, it's just plain the way it's been done. Tradition is hard to change.

Lenders, borrowers and the governement are all to blame for where we are today, and as the article suggests, not much has changed. (Plus it's in the "independent", hello?) Saying that the article is wrong because borrowers are to blame is on the same intellectual level as the article. Seriously, grow up.

If you want to change the process, start by educating everyone. Gov.ie needs to educate borrowers (and themselves on basic economics), borrowers needs to buck up and educate themselves, and lenders need to be educated by letting them suffer the consequences of their actions.
 
On the first part, oh that such wisdom prevailed a few years back. I think the base point is that consumers always need to be protected from themselves because they have proved themselves to be essentially clueless and greedy. It's that nasty 'human' factor they all possess. If 100xsalary loans are available, people will grab them up despite the "end-of-their-world" warnings that might accompany them. To stop the nonsense this is where the regulator comes in. Thanks be to god we now have a regulator with balls and brains at the moment.
You don't seriously believe that by merely changing the person that runs the regulatory body the world is going to be fine in the future? Every time some huge bubble bursts, especially financial ones, it is blamed on bad or insufficient regulations, or even deregulation. It is then preached, that all that is needed is the right person and he/she has been found and everything is going to be fine. Fastfoward a few years and the same happens again.
Regulation is not the answer. Costs of regulatory compliance has gone steadily up for the past 20 years, due to ever increasing regulations. This is hardly deregulation, and therefore cannot be used as the scape goat for the financial crisis.
If you want to protect consumers then start with the eductational system and not regulation. All regulation does is make it ever more impossible for new companies to enter the market and provide competition. When was the last time you heard of a new private bank being created? The more competition there is in a market the better for the consumer, and the lower the risk is.

I hate this argument. Banks deal in money and finance, it's their primary purpose. People don't, and mortgages aren't simple transactions. They go to the bank and expect them to give them what they can afford, and while that's certainly misguided, it's just plain the way it's been done. Tradition is hard to change.
Mortgages are not some complex being. From the consumers point of view it is simple: the bank lends you a certain amount of money for a set time at certain interest conditions, and all you are obliged to do is ensure you can make the monthly payments in good and bad times.
It is only the individual who can truly decide if they can afford a mortgage now and under worse financial conditions. Now banks have to do their own homework before they issue loans, and they certainly did a misreable job of it, but if banks are willing to take a certain level of risk then nothing should stop them from doing so. The profit AND loss system would be perfectly adequate to keep risk levels in balance. Profits encourage risk taking, while losses encourage prudence. When you take away the risk of loss you end up with the situation we are in. And the only ones to blame for that are governments, for always bailing out financial institutions in crisis.
I also think it is a very bad mistake to to say that financial ignorance is the way we do things and that's OK.

Lenders, borrowers and the governement are all to blame for where we are today, and as the article suggests, not much has changed. (Plus it's in the "independent", hello?) Saying that the article is wrong because borrowers are to blame is on the same intellectual level as the article. Seriously, grow up.
I agree, but the largest blame rests on governments and central banks for providing the money at such low interest rates. Borrowers are the only ones to blame if they did not make adequate provisions to cope in the bad times, whether this be out of ignorance or carelessness doesn't matter.
Why would anybody expect banks to change their lending practices? The only ones that can force them to do so is their creditors, and they have been bailed out. So as a bank creditor you are quite happy for them to continue doing what they did. Borrowers on the other hand should seriously be less ignorant after the events of the past 3 years.

If you want to change the process, start by educating everyone. Gov.ie needs to educate borrowers (and themselves on basic economics), borrowers needs to buck up and educate themselves, and lenders need to be educated by letting them suffer the consequences of their actions.
I fully agree with you. I know of so many highly educated people, that do not know the first thing about personal finance. And I would love to see a world where no company or industry or group of individuals is bailed out for making mistakes. The costs of the mistakes of some should never be carried by society as a whole. All that does is reduce the risk for the risk taker. Heads I win, tails I break even; that can only lead down one road.
 
A fair post on most points Chris, but I can't agree with you on this:

Mortgages are not some complex being.

Maybe not to you, but I just got a mortgage, and to me, it was complex; and I probably have a better grasp of finance that the majority, given that I did all three business subjects for my Leaving (not very well, but some of the info has to have stuck).

It's not a credit union loan where you're given a fixed payment for n months, it's a complex transaction over many years - decades, usually - where the payments can vary a considerable amount based on many factors; the difficult-to-enumerate "incompetence of the banks" being one. On top of that there's multiple types of insurance to research, and all the associated crap (medicals, house alarms) that goes with them; all while you're researching houses and dealing with estate agents, solicitors, etc, etc. And while all that's going on, every Tom, Dick and Harry is telling you you're doing it wrong, you should get $this morgage from $that company and your insurance from $here and you should be spinning on your head on Tuesdays and shouting "wibble" to make sure it all goes right.

I'd guess a huge majority of mortgage borrowers are befuddled by the whole thing and running on advice from others, and as I mentioned, most of the advice comes from the lender, and it's usually the most credible (to the borrower).

I'm not denying the borrower has a blame to shoulder. But trying to put it all - or even most of it - on the borrower is just not reasonable. The banks and the governement should shoulder a good majority of the blame for where we are, and why things aren't changing. In particular why things aren't changing.

adam
 
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