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Thread: Labour to reveal state-backed mortgages plan

  1. #1
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    Default Labour to reveal state-backed mortgages plan

    Looks like a relatively clever and well thought out policy

    Labour to reveal state-backed mortgages plan | Irish Examiner

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    Politics.ie Member LeDroit's Avatar
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    So let me get this straight;
    1. Labour create a new quango.
    2. Labour guarantee the borrowings of householders who would otherwise not be able to guarantee to pay back their mortgages.
    3. Labour then bundle together these guarantees and sell it as a bond on the open market.

    Is this sounding familiar to anyone? It's basically the FannyMae/FreddieMac debacle all over again. Once these people start defaulting the State will be left to pick up the tab and the junk bond will infect the whole system!

    It's no wonder Labour don't do policymaking. They should stick to populist soundbites.
    "A govt big enough to give you everything you want, is strong enough to take everything you have" Thomas Jefferson

  3. #3

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    Quote Originally Posted by LeDroit View Post
    So let me get this straight;
    1. Labour create a new quango.
    2. Labour guarantee the borrowings of householders who would otherwise not be able to guarantee to pay back their mortgages.
    3. Labour then bundle together these guarantees and sell it as a bond on the open market.

    Is this sounding familiar to anyone? It's basically the FannyMae/FreddieMac debacle all over again. Once these people start defaulting the State will be left to pick up the tab and the junk bond will infect the whole system!

    It's no wonder Labour don't do policymaking. They should stick to populist soundbites.
    Not only that but anybody thinking of availing of them would have to take out multiple Insurance products as well.

    Labour SUB PRIME coming soon to a bank near you.

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    Politics.ie Member libertarian-right's Avatar
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    Labour just keep bringing out more new reasons not to vote for them!

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    Politics.ie Member needle_too's Avatar
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    Brilliant plan!

    Loan state money to prop up inflated house prices.

    Cant see any problem with that.

    Not a one.

    No Sir.

    Edit - Just for sh!ts and giggles I notice its even called 'Prop'. LOL. Genius.

    Labour - blowing into a deflating balloon.

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    I am pleasantly surprised to see Labour coming forward with a policy/plan in the area.

    However i was wondering where i could buy some CDS in relation to these securities?

    Bad idea

  7. #7

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    "It also includes a proposal for banks to pool bundles of the state-guaranteed mortgages to create bonds that would be sold to investors on the international markets. "

    oh dear god - here we go again - SUBPRIME MORTGAGES.

    this is exactly what happened in the U.S. , with state owned Fannie Mae and Freddie Mac mortgages - and that caused the current crisis in the first place.

    Sorry Labour - you need to try again. this aint going to work.

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    Politics.ie Member White Horse's Avatar
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    All this will do is to keep property prices artificially high and continue our wage uncompetitiveness.

  9. #9

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    and it gets better...

    "To offset risks for the state, the property, while it could be old or new, must be within a price range set by the agency, thereby ruling out excessive lending that led to the property bubble burst."


    so in effect, Labour are proposing to nationalise the property market, via price controls.

    as well as introducing subprime mortgages:
    "As part of the proposed Labour policy, pools of mortgages would be sold as bonds on the international markets thus promoting international investment in Ireland. "

    dear god almighty.

    Can anyone in Labour think outside the usual Soviet state controlled mental box?
    Seems like they can't.

  10. #10
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    Quote Originally Posted by johntrenchard View Post
    and it gets better...

    "To offset risks for the state, the property, while it could be old or new, must be within a price range set by the agency, thereby ruling out excessive lending that led to the property bubble burst."


    so in effect, Labour are proposing to nationalise the property market, via price controls.
    In fairness, that doesn't represent price controls. They are saying that the State back mortgage system would only lend if the price of the house was reasonable.

    Ofc, if they ban people who obtain their own mortgages from buying/selling outside that price, then that represents price controls.

    Also, it sounds like they won't lend mortgages if the price is to low, which is a terrible idea. It prevents the buyer from getting a reasonable price, which puts the lender at more risk.

    However, I do agree that state back mortgages are not a good plan.

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