Real estate : they invent… the new subprime

Meanwhile, Government Savings Bank (GSB) will set up a joint venture with insurance companies to provide mortgage insurance service to home-buyers to stimulate sales in the real-estate sector, Deputy Prime Minister Korbsak Sabhavasu said.

GSB will hold a 20 per cent stake in the proposed venture.

This measure would allow low-income home-buyers to borrow up to 100 per cent of the property value. They could also pay for the down payment in instalments,” Korbsak said.

Home-buyers are usually required to put up cash, worth about 20-30 per cent of the property value, as down payments. (Nation)

Among the totally inane propositions of the Abhisit government (“Government aims to increase farm prices by 30% this year“)… we can find this gem : the thai subprime ! 😉

Well done guys.

A special program for people with low income… no down payment… and with a loan covering 100 % of the price a property… That’s a perfect recipe for disaster, as we saw in the US.

But Korn, the Finance Minister and ex investment banker, is probably thinking that he’s smarter than the bozos at Wall Street (well actually, it wouldn’t be hard).

Anyway, it’s important to note that Abhisit and his ministers are currently multiplying announcements, with huge amounts, without any order and plan. Probably, most of those “announcements” will never materialize…

Agitation first. And soon after, desesperation will follow.

1 Response to “Real estate : they invent… the new subprime”

  1. 1 FDL 15 January 2009 at 1:38 am

    I remember well the American’s notorious NINJA loans that preceded USA’s eventual financial meltdown. NINJA for loans to Americans with No Income No Jobs and No Assets.

    That must have been the inspiration for this genius of a give-away plan by the Abhisit government.

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Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.

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