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Industry bodies slam PM’s plan to axe 100% deals

Prime Minister Gordon Brown’s idea to axe 100% mortgages has been slated by the industry.

Under the plan, buyers would be forced to find deposits of at least 5%. The ban forms part of a package of rescue proposals from the government including insuring banks’ toxic assets by putting up to£400bn of bad debts into a ‘bad bank’, thus allowing the Bank of England to begin£100bn of quantitative easing to encourage lending and make a cash injection of up to £10bn so that Northern Rock can issue new mortgages.

The Intermediary Mortgage Lenders Association and the Council of Mortgage Lenders have voiced concerns about the ban. IMLA told Lending Strategy’s sister magazine Mortgage Strategy this would be the start of a slippery slope to government intervention and the CML claimed there was a risk home owners may try to top up mortgages with unsecured debt.”

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