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The British panic
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Re: The British panic
government guarantees on mortgages... nice win/win for banks! they can hand out mortgages to people who shouldn't have them, without running any risk!Originally posted by Mega View Post
The same is done in the Netherlands for guaranteeing up to €265000 on mortgages that are capped at €350000. Free money for the banks! The main 'problem' is that they have serious problems financing these mortgages, as international investors are not happy to invest into mortgages with a LTV of higher than 80% (Basel III requirements), and Dutch mortgages go all the way up to 106% LTV (gee I wonder if that could go wrong!).
Canada and the US offer similar guarantee schemes, afaik.engineer with little (or even no) economic insight
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