Brendan Burgess
Founder
- Messages
- 52,184
There is no way in hell a bunch of politicians should be allowed anywhere near setting mortgage rates.
I'm sure Brendan is not proposing that any rate-fixing powers should be vested in vote chasing politicians or their appointed functionaries. That would obviously be pure madness.
It seems pretty obvious to me that FF's bill, in its current form, is a dead duck.
However, I think it is worth noting that the ECB has no principled objection to the introduction of statutory caps of the type that exist in other EU countries that are designed to address usurious lending practices.
Michael McGrath was making the argument during the week that there is nothing under our laws to prevent a vulture fund from acquiring a mortgage book and jacking up the rates to levels that are way above market. It's a fair point and I actually agree with him that borrowers that are not in a position to refinance their loans for whatever reason are deserving of a degree of statutory protection.
However, rate-fixing powers don't have to be vested in anybody to address this issue.
We could simply adopt the French model where a statutory cap prevents variable home loan rates exceeding 133% of the average rate charged on similar outstanding loans (including trackers) in the previous quarter.
I struggle to understand why anybody (other than predatory sub-prime lenders) would object to that proposal.
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