JSMedia – The yes vote is a big deal for the mortgage industry. Lenders are worried that the property market in Scotland will plummet, and the influx of foreign nationals could cause a massive recession.
This is the same fear that lenders have for Hungary, which collapsed when the citizens of that country took out mortgages in another currency. If the yes vote happens in Scotland, lenders will be a bit more wary of offering loans in the country’s own currency, but it won’t be as significant a problem as they thought.
A no vote would mean that the bill would not pass because of the Republican filibuster. The Republicans in the House fought hard to win over moderates who would vote ‘yes.
Why Are the Mortgage Lenders Fretting About the Yes Vote?
However, it’s unclear whether the incoming House majority will allow a bailout to take place. A majority of Democrats oppose it, and the Republicans support it. If a no vote occurs in the House, the mortgage lenders will be impacted the most.
If a yes vote happens in Scotland, the banks are worried that their customers north of the border will switch their mortgages to a new currency. They are also worried that this will lead the new currency to tumble against the pound. This is a big problem for the banks, but the answer is re-denominating mortgages. The banks would need to change the rules to reflect the new currency. But mortgage brokers say that there is no legal basis for re-denominating mortgages and no one in the industry has ever even thought of this before.