• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

Brown seeks to ban '100 percent' mortgages

Posted on: Sunday, 22 February 2009, 09:31 CST

British Prime Minister Gordon Brown is seeking to ban 100 percent mortgages as part of his efforts to save the country's banking system, sources say.

Brown will ask financial regulators to prevent banks from issuing such mortgages -- in which 100 percent of the property's full value is financed -- and instead require banks to collect a down payment of at least 5 percent, The Sunday Times of London reported without naming sources.

Even though the rule would hit first-time homebuyers hardest, Brown told The Sunday Times, We want to see the reinvention of the traditional savings and mortgage bank in Britain, making loans on prudent and careful terms.

The 100 percent mortgage rule is part of a new British financial industry bailout effort that will also include government insurance of toxic assets, with up to $577 billion of non-performing mortgage securities set to be put into a bad bank.

Also on Brown's agenda is a move to allow the Bank of England to issue $144 billion of quantitative easing, essentially printing money, to prod banks into resuming lending, the newspaper reported.

Source: United Press International

More News in this Category