10 Simple ideas the Expert Group mostly missed out on

1. Mandatory Mortgage Indemnity Guarantees (MIG’s) for all residential loans over 75% LTV – that way if the loan goes bad the shortfall doesn’t land entirely on the borrowers shoulders.
2. Recourse on residential lending should be restricted to the property only (allowing non-judicial foreclosure). This could be made policy in the morning if it was on all loans from this point on.
3. Ban on Personal Liability Guarantees (PLG’s) – so banks don’t have a side contract to get at the individual in the future.
4. National Repayment Insurance Plan (Canada/Netherlands for example).
5. Credit pricing based upon risk.
6. Maximum loans of 80% with higher LTV’s (to 92%) covered by a separate unsecured loan which is secured as a 2nd lien.
7. Maximum terms of 35 years
8. Stress tests at either 2% above variable or the 5yr fixed rate.
9. Site or Land Value Tax (in line with programme for Government) – it’s an excellent bubble control tool.
10. Regulated Short Sale process with guidelines.

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