Brendan Burgess
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Interesting article in today's Irish Times
No impact on mortgage securities ratings from variable cap - Fitch
"The ratings agency said a reduction in borrowing costs would improve the affordability of mortgages and reduce the stress on borrowers, thereby improving the performance of mortgage pools.
...
The agency said any move to make lenders cut rates would make it difficult for them to sustain profitability and build up capital through retained earnings."
Of course if a lender is prevented from overcharging borrowers, it will be less profitable and will build up less capital. But the same will happen if a new lender enters the market and offers loans at fairer rates.
http://www.irishtimes.com/business/...ies-ratings-from-variable-cap-fitch-1.2290949
No impact on mortgage securities ratings from variable cap - Fitch
"The ratings agency said a reduction in borrowing costs would improve the affordability of mortgages and reduce the stress on borrowers, thereby improving the performance of mortgage pools.
...
The agency said any move to make lenders cut rates would make it difficult for them to sustain profitability and build up capital through retained earnings."
Of course if a lender is prevented from overcharging borrowers, it will be less profitable and will build up less capital. But the same will happen if a new lender enters the market and offers loans at fairer rates.
http://www.irishtimes.com/business/...ies-ratings-from-variable-cap-fitch-1.2290949