Housing Stock, Mortgage Market, Loan To Value Ratio, Bank Balance Sheets. Skin in the Game? #ModuloftAffordableMortgageFinance #FirstTimeBuyers

Condense of Mortgage reform valuation stuff Fir ref ( Notes in progress)


Written June 2011. On ROger Lewis’s Blog.
Note of interest here is the idea of longer term financing even intergenerational financing after all what are government debt if not intergenerational financing through taxation more democratic to have longer term time frames this of course poses problems for the current system regarding booking large profits over shorter time horizons I argue that this is a systemic disjoint in one of the basic human rights to Shelter.
This is a theme to be developed regarding Price and Value and the Trading of Mortgage Securities and distressed asset sales as opposed to the more egalitarian course of action which would be to Create some sort of Amnesty on Mortgages ( Principal residence only and even up to a Minimum price say £250k in UK figure could be arrived at by discussion.
The idea that Banks have been caught out more than home owners is perverse. The Banks have created commitments for the borrowers to them and actually not given in return what the Borrowers largely believed I.E that their Mortgage is matched by and equal deposit/ saving of another bank customer. At best the banks have 1 tenth of this covered 10% and in many cases it is more like 1 fortieth 1/40 2.5% so on a mortgage of £100,000
the bank only has capital of at most £10k at risk and in all likely hood more probably £4k at risk. Therefore in distressed sales all on going mortgage payments made should be viewed accordingly and and distressed asset sale again viewed similarly.
I,e a mortgage holder with 25k negative equity on a mortgage of 100k still has an asset worth at least 7.5 x the capital reserve the bank allocated against making that loan. I.E the borrower remains in debt for 100k a new debt of 75k is created and and the bank gets all its basic capital back has had the interest in the meantime and will still milk the original borrower through the Bankruptcy process for a further 2 years representing further pure profit.
Other commitment bank have created beyond the reserve ratios based on trading these very profitable rights to receive mortgage payments cause the banks to be insolvent but compound the extent to which the original deceit is leveraged to the cost of the Mortgage Payer who is also the future tax payer for the government debt taken on the Save the banks from their excesses with their derivatives based upon the imaginary debt money they are licensed to create in the first place.
LAST PARA TO BE WORKED UP INTO FULL MATHEMATICAL PROOF.
Opinion Banks
Bank capital buffers aren’t working
Regulators must rethink overlapping Basel III requirements before the next crisis
https://www.ft.com/content/d602dae8-7a39-4053-84b5-49ad62cf9272

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In banking regulation, such an insurance policy is called MREL, the minimum requirement for own funds and eligible liabilities. This aims to ensure that bank shareholders and creditors bear the losses of when banks go bust.

https://www.ft.com/content/936a8575-04e0-44a4-95dd-95ce1611243f
Bank capital rules delayed to help lenders respond to coronavirus