Teetering on the brink of the new Depression

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stray S
stray Sep 20, 2008 10:53:00
Replying to nigelswift

Aha! Right, I got yer thanks, makes sense, cheers. :)

The price, like the price of anything, is whatever people can/will pay and the easy/silly credit made it balloon, as people could afford more than they should be able to. But as you've explained, the original valuations are arbitrary and don't actually relate directly (in a proper mathematical relationship) to what was happening in the internal credit market. Its a chicken/egg relationship, and now the egg doesnt exist anymore.

N nigelswift
nigelswift Sep 20, 2008 11:13:27
Replying to stray

"Its a chicken/egg relationship, and now the egg doesnt exist anymore."

Well in the fifties, when you wanted a mortgage, you'd have to beg, then go on a six month waiting list, prove you and your parents and grandparents were respectable and then maybe they'd give you a 75% loan. In the past decade, mortgage intermediaries package applications having fictionalised the status of the applicants and the property and next day decisions could be given for 13O% loans! It was an open secret that for a period the largest UK building society asked for the names of references but rarely followed them up! As a young valuer a local agent offered me £1,000 per "good" valuation. Not bad for an hours work, for someone with a young family earning less than 8K a year! And really, proving someone is crooked is quite hard, it's only a "judgement" after all.