Rules ‘to help mortgage prisoners’

originally by: http://news.uk.msn.com/articles.aspx?cp-documentid=160067120
published:  15 December 2011

Next week the Financial Services Authority (FSA) will announce the change in mortgage application rules, according to the Daily Mail. A lot of people are locked in negative equity and unable to move house. New mortgage rules will help those struggling to upgrade their home by making them able to get better loans. After the announcement follows a two-year inquiry will reveal proposals designed to stop a repeat of the excessive and dangerous lending that led to the banking crisis with a set of tough new rules.The loose of lending restrictions is understood to only be available to customers who have not had problems repaying the mortgage they took out. One in twelve homeowners are currently in negative equity, where the value of their home is less than the amount of mortgage they owe.

My reaction

The cause of the worldwide economic crisis was the irresponsible course of actions of the banks. The effects of the crisis are about the same in the Netherlands and the UK. In the Netherlands we also suffered from governmental cuts and collapse of the housing sector. Many people are unable to repay their mortgage they took out before the crisis.

The government of the UK is doing a good thing by changing the rules which prevent banks from making the same mistakes and which benefits the victims of the high mortgage. I don’t think the rules for banks and mortgage have changed in the Netherlands.