Mortgage Strategy articles from August 2008

Mortgage Strategy archives from August 2008

COMMENT: Sir James knows that brokers matter.
August 4, 2008... You know it. Mortgage Strategy knows it. Sir James Crosby knows it. And now, old panda chops in the Treasury and Gordon Brown must know it too. Mortgage intermediaries are "an important source of price competition on behalf of...

IN BRIEF: MI makes 18 redundancies.(Brief article)
August 4, 2008... Mortgage Intelligence has made 18 redundancies. Sally Laker, managing director of MI, announced the cuts on Friday but pledged to maintain service levels. She says: "This decision is regrettable but we are not immune to the difficult...

IN BRIEF: BSA reveals net lending plunge.(Brief article)
August 4, 2008... The Building Societies Association last week revealed a near #5bn drop in net lending by members in the first half of 2008. The BSA says net lending for societies was down from #8.43bn in the first six months of 2007 to #3.45bn in the...

IN BRIEF: Good news for Just Retirement.(Brief article)
August 4, 2008... Just Retirement has seen a 27% rise in equity release advances in the first half of 2008, increasing its six-month total from #125.2m to #159m year-on-year. Sales rose 12.8% to #763.5m year-on-year. Copyright: Centaur Communications Ltd....

Abbey and HBOS slug it out.
August 4, 2008... Abbey and HBOS are battling it out for the title of the UK's biggest mortgage lender as both lay claim to having the leading market share. Abbey claims it has overtaken HBOS' long-standing position as the UK's largest lender with 26% of...

Criminal checks for brokers mooted.
August 4, 2008... Compliance expert Gary Dixon is calling on the Financial Services Authority to make mortgage brokers subject to criminal record checks. Currently only approved persons such as investment advisers have to face such checks. Dixon,...

Brokers savvy enough to survive, says L&G.
August 4, 2008... Legal & General Mortgage Club has sought to offer brokers causes for optimism after damning statements by Sir James Crosby in his interim report last week. Sir James says brokers are facing pressures such as lower volumes and lenders...

Firms expect sales to drop 6% in 12 months.
August 4, 2008... Every broker out of the 505 polled by the Intermediary Mortgage Lenders Association expect their mortgage sales volumes will fall by at least 6% in the next 12 months. The survey, carried out in May, also reveals that 49% of respondents...

Lee Birkett payment fuels discontent at Prestbury.
August 4, 2008... A #224,000 payment received by chief executive Lee Birkett is at the heart of the controversy surrounding Prestbury, as shareholders push for the removal of Lee and his mother Lynne as directors of the company. A source in the network...

No evidence of HBOS conspiracy.
August 4, 2008... The Financial Services Authority has found no evidence of claims that HBOS was the victim of a conspiracy to spread false rumours of a funding crisis in March. Last week the regulator revealed that it has concluded its investigation into...

IN BRIEF: Long-term deals on the increase.(Brief article)
August 4, 2008... The proportion of long-term fixed rate mortgages has almost doubled in the past 12 months, MoneyExpert.com claims. The financial comparison website says the percentage of 10-year fixed rate deals or longer has risen from 8% of all products in...

IN BRIEF: OFT consultation on lending study.(Brief article)
August 4, 2008... The Office of Fair Trading has launched a public consultation on the scope of its investigation into irresponsible lending in the consumer credit markets. The study will consider all forms of consumer credit lending which the OFT licences...

IN BRIEF: Appointments at Coventry.(Brief article)
August 4, 2008... Coventry has appointed two non-executive directors. Roger Burnell, former chief operating officer of the Thomson Travel Group, and Ian Geden, group chief executive of NFU Mutual, will start on September 1. Copyright: Centaur Communications...

IN BRIEF: Woolwich cuts buy-to-let rates.(Brief article)
August 4, 2008... Woolwich has slashed the rates on its key buy-to-let mortgages. It is reducing its lifetime tracker by 0.4% and its five-year fixed rate deal by 0.5%. Copyright: Centaur Communications Ltd. and licensors

S&P says prices will fall 17%.
August 4, 2008... Economists at Standard & Poor's predict that UK house prices will fall a further 17% before flattening out in 2009. Experts at the ratings agency suggest that the number of consumers in negative equity will rise from an estimated 70,000...

Platform slashes packager panel from 50 to 16.
August 4, 2008... Platform has shed more than half its packager panel, joining the growing list of lenders that have slashed distribution in 2008. Last week the Britannia-owned lender reduced its panel from 50 to 16 because of limited funds for lending. ...

Call for clarity on sales and advice.
August 4, 2008... The Association of Independent Financial Advisers has called on the government and the Financial Services Authority to make the differences between sales and advice clearer to consumers. Chris Cummings, director-general of AIFA, made the...

Lifetime interest on the up.
August 4, 2008... Research by Mortgage Express has revealed an increase in lifetime mortgage enquiries to brokers since July 2007. The firm's poll of 138 brokers in June shows 59% are already active in the sector, 62% of whom have seen a rise in new...

Abbey beefs up large loans range.
August 4, 2008... Abbey has enhanced its large loans range with the launch of two products after rivals strengthened their super-size offerings. The deals comprise a three-year fixed rate product at 6.79% and a three- year tracker at 6.34%, both available to...

IN BRIEF: Merrill to boost balance sheet.(Brief article)
August 4, 2008... Merrill Lynch has revealed plans to bolster its balance sheet by raising #4.27bn and selling #5.6bn worth of mortgage-backed securities. The group says it expects to record a #2.2bn write-down in Q3 2008. Copyright: Centaur Communications...

IN BRIEF: Pink links up with trio for bridging.(Brief article)
August 4, 2008... Pink Home Loans has teamed up with three lenders to launch its bridging finance proposition. Pink is offering products through Affirmative, Cheval and Lowry Capital. Copyright: Centaur Communications Ltd. and licensors

IN BRIEF: Manor valuation offer with B&W.(Brief article)
August 4, 2008... Manor Mortgages has launched a valuation and remortgage legals deal with Bristol & West. For B&W's fast-track 6.15% discount and 6.45% fixed rate products, Manor is offering a reduced valuation fee of #199 together with remortgage legals for...

Fine shows PPI still mis-sold, says Which?
August 4, 2008... The Financial Services Authority's #840,000 fine of Liverpool Victoria Banking Services for payment protection insurance failings shows the product is still being mis-sold, Which? claims. Last week the regulator revealed that it had fined...

IOSCO reviews compliance with code.
August 4, 2008... The International Organisation of Securities Commissions has started to review credit ratings agencies' compliance with its newly published code of conduct. IOSCO says the code will focus on ratings agencies' transparency and...

Stability the watchword for Skipton this year.
August 4, 2008... Skipton's outgoing chief executive says 2008 has been more about stability than profitability after the mutual's results revealed falling profits in the first half of 2008. John Goodfellow had previously warned that Skipton's...

Landlords put off rent-back by bad press.
August 4, 2008... The Money Centre says landlords are running scared of sale-and-rent- back as a result of the bad press the market has attracted. The specialist buy-to-let brokerage commissioned independent research that asked 520 landlords in 30-minute...

Mortgage fraud cases are spiralling.
August 4, 2008... Just nine cases of mortgage fraud in the first half of 2008 cost a staggering #20m, research by KPMG reveals. By contrast, in the whole of 2007 there were 10 known mortgage fraud cases totalling just #3.7m. KPMG found a record level...

TMA poll finds MPPI criticism has not dented sales.
August 4, 2008... The Mortgage Alliance claims that mortgage payment protection insurance sales via brokers have been unaffected by the recent run of bad publicity about the product. It polled 120 brokers as part of its inaugural survey into the general...

Brokers urged to spread word about protection.
August 4, 2008... Brokers must ensure clients are protected against the effects of an uncertain economy, Paymentshield says. The warning follows research by the Yorkshire, which found that some consumers could only survive for 12 days if they lost their...

IN BRIEF: New low for client confidence.(Brief article)
August 4, 2008... Consumer research group GfK NOP has reported the lowest levels of consumer confidence since it began surveying the subject in 1974. Confidence is at -39, a 33 point drop compared with this time last year. Donna Culverwell, member of the...

IN BRIEF: HSBC shares LIBOR benefits.(Brief article)
August 4, 2008... HSBC will pass on the benefits of lower funding costs to clients by cutting rates and fees on fixed products. Standard two-year fixed rate deals will drop by 0.31%, with booking fees falling from #799 to #599. Longer fixed rate deals will drop...

IN BRIEF: L&G club offers two-year tracker.(Brief article)
August 4, 2008... Legal & General Mortgage Club is launching an exclusive two-year tracker at 5.99% from Scottish Widows Bank. It offers a free offset facility with a #999 arrangement fee. Remortgage clients will receive either a remortgage package or...

IN BRIEF: SMS Devon office faces job cuts.(Brief article)
August 4, 2008... Solent Mortgage Services has confirmed it is in redundancy consultation with staff at its Devon office. Paul Robinson, director of SMS, says: "With the market not improving we have had to look at our cost base again and as a result have...

IN BRIEF: Pink AR seminars kick off this month.(Brief article)
August 4, 2008... Pink Home Loans has unveiled details of its forthcoming appointed representative seminars. The events will kick off across the country on August 27 and will cover subjects under the theme 'New for 2008'. Pink will be visiting ARs in London,...

IN BRIEF: Debt firm expects record enquiries.(Brief article)
August 4, 2008... Business Debtline is expecting record numbers of enquiries for debt advice this year from small firms and the self-employed who face trading in a recession for the first time. Copyright: Centaur Communications Ltd. and licensors

Pain to take FSA retail reins.
August 4, 2008... The Financial Services Authority's new retail markets chief will be given a mandate to regulate all mortgage lenders, intermediaries and insurance firms. Jon Pain, who has joined the FSA board as managing director, retail markets, will...

Good news for B2L as yields hold up.
August 4, 2008... Paragon Mortgages says rental yields held at 6.4% in June for the second month running, giving landlords further cause for optimism. The specialist lender's buy-to-let index shows that average UK rents, which have been soaring in recent...

AHIPP rejects code of conduct criticism.
August 4, 2008... The Association of Home Information Pack Providers has rejected Easier2Move's suggestion that its code of conduct does not go far enough because it doesn't ensure members guarantee the accuracy of their reports. Mike Ockenden,...

Hodge sounds warning of ERC threat to sector.
August 4, 2008... Hodge Equity Release has warned of the threat that early repayment charges pose to the sector if brokers do not consider them when advising clients. The firm says that if the failure to take ERCs into account becomes widespread it could...

Calls to tackle crunch now.
August 4, 2008... The latest drop in house prices reported by the Land Registry has fuelled further calls for immediate action to resurrect the lending market. The Land Registry's monthly house price index reported last week that house prices fell 1% in...

Pink slashes processing times by half.
August 4, 2008... Pink Home Loans has cut processing times for applications by half after working closely with GE Money Home Lending to improve efficiency. GEMHL experts have been working with Pink's mortgage services team to streamline its methods. ...

Intermediaries flock to Mortgage Brain's Key.
August 4, 2008... Mortgage Brain has revealed that more than 4,000 intermediaries now use its Key system. In recent months a number of firms including Hamptons International, Pink Home Loans and Sesame have chosen to exclusively use the Key, Mortgage...

Tesco says mortgages are not on the agenda.
August 4, 2008... Tesco Personal Finance has rejected reports that it is looking to launch into the mortgage market. Last week the supermarket chain bought out the Royal Bank of Scotland's 50% stake in TPF as part of a worldwide push into the financial...

IN BRIEF: Accord launches two-year fix.(Brief article)
August 4, 2008... Accord Mortgages has launched a two-year fixed rate mortgage at 5.49% up to 60% LTV. Fixed until September 30 2010, the product features a 2.5% fee and a 4% early repayment charge. The fee can be added to the loan amount. Overpayments of up...

IN BRIEF: Business Finance re-enters market.(Brief article)
August 4, 2008... Business Finance UK has re-entered the commercial market. It was active in the sector several years ago but has now appointed Commercial Mortgage Solutions to run its sales processing centre and provide exclusive distribution for its lending....

IN BRIEF: IVA firm signs deal with DMS.(Brief article)
August 4, 2008... TCF Debt Solutions has signed an agreement with protection network DMS. The network provides advice on protection products including accident, sickness and unemployment insurance. Under the agreement, DMS will refer indebted clients to the...

IN BRIEF: Link joins bridging packager panel.(Brief article)
August 4, 2008... Link Lending has joined Portfield's lending panel. The bridging packager says it has added Link to introduce more brokers to the benefits of bridging finance. The firm charges no fees and has no minimum terms. Mark Stringer, managing director...

IN BRIEF: L&G on Paradigm protection panels.(Brief article)
August 4, 2008... Legal & General has been added to Paradigm Mortgage Services' preferred and limited protection panels. L&G's products include mortgage term assurance and mortgage payment protection insurance. Brokers can quote and apply online using...

Newcastle option for NR staff.
August 4, 2008... Newcastle says its recruitment drive could help some of the 1,300 Northern Rock employees facing redundancy. The building society created 160 new jobs in the first half of 2008 and is recruiting to fill around 200 vacancies that will match...

NHF makes dire prediction for FTBs.
August 4, 2008... The National Housing Federation predicts first-time buyers will remain locked out of the property market until 2013. In its annual Home Truths publication, the NHF says affordability is worsening as a result of the credit crunch and that...

SYH warns against rent-back incentive.
August 4, 2008... SYH Charterhouse is warning brokers against taking part in a sale-and- rent-back scheme that pays according to changes in property values. Property Leasing Company, a broker-facing sale-and-rent-back company, says it aims to help brokers...

MSN marketer takes on Propertyfinder role.
August 4, 2008... Propertyfinder.com has hired former MSN marketing director Natalie Mead to head up its revamped marketing office. Mead, now marketing and products director at the property portal, specialises in online audience targeting and promoting...

Government can't afford to wait until autumn.
August 4, 2008... The mortgage industry is lobbying the government to launch urgent action to tackle lenders' crippling funding problems in the wake of Sir James Crosby's interim report. The report, which focusses on mortgage finance, has triggered...

What do you think of Sir James' interim report?
August 4, 2008... Michael Coogan, director-general, Council of Mortgage Lenders As Bank of England figures on lending to individuals show, the mortgage market remains severely constrained. Lenders are unable to meet consumer demand for mortgages because...

IN BRIEF: FirstPlus cheques cancelled.(Brief article)
August 4, 2008... Barclays has cancelled all FirstPlus cheques issued between July 14 and 18 because of a system error. FirstPlus, which recently announced it would be closing, says the wrong details may have been entered on cheques issued on these dates. As a...

IN BRIEF: FTBs pessimistic about future.(Brief article)
August 4, 2008... Buying houses on the open market will soon be a thing of the past for most first-time buyers, research by housing association East Homes claims. It says nearly three-quarters of 16 to 34 year olds polled in its annual My Home survey think New...

IN BRIEF: Aegon joins Paradigm panel.(Brief article)
August 4, 2008... Aegon Scottish Equitable has joined Paradigm Mortgage Services' preferred protection panel, giving its brokers access to a range of protection products. Copyright: Centaur Communications Ltd. and licensors

ANALYSIS: Market watch - 04.08.08.
August 4, 2008... Swaps fell significantly last week. They are back down to where they were a couple of months ago and are getting close to their average levels over the past two years. Let's hope the trend continues as lenders are passing these cuts onto fixed...

ANALYSIS: Balance sheets hold key to recovery.
August 4, 2008... The past few weeks have seen a notable shift in sentiment and - dare I say it - the phrase 'bottom of the market' has increasingly been heard from the great and good. The first big sign was the bid from Spanish bank Santander for...

ANALYSIS: Take credit for HIPs' success, Gordon.
August 4, 2008... It would be churlish not to mark the first anniversary of Home Information Packs with plaudits and congratulations. Despite the huge number of column inches devoted to discussing HIPs, both for and against, hindsight shows the extent to...

ANALYSIS: Glimmers of light in the market gloom.
August 4, 2008... The past couple of weeks brought another glut of news relating to the mortgage market as the credit crunch maintained its dominance of the news pages. But there was a different feel to some of the coverage. There was sudden panic about...

ANALYSIS: Freshen up your approach to business.
August 4, 2008... I am writing this column sitting beside a swimming pool, admiring the beautiful Tuscan countryside. Yes, it's holiday time and like many individuals in the financial services sector I felt the need to recharge my batteries this year. But...

ANALYSIS: Losing the plot in Hector's last act.
August 4, 2008... OK, I admit the headline of this piece is slightly misleading. Hector Sants, chief executive of the Financial Services Authority, hasn't resigned and paddled off into the North Sea in a canoe. And even if he had he'd probably be wearing two...

ANALYSIS: Guarding against affordability claims.
August 4, 2008... Readers of the Financial Services Compensation Scheme's annual report will probably be as surprised as me to learn that endowment claims still make up the largest percentage of new claims. These products were sold at least a decade ago and...

LETTER: Solicitors and brokers must work together to fight fraud.(Letter to the editor)
August 4, 2008... From Alan Cleary I refer to the letter from the Law Society in last week's issue of Mortgage Strategy. Having worked in the lending industry for around 15 years with lenders large and small, I am surprised that the Law Society has...

LETTER: Mortgage clubs offer DA firms help.(Letter to the editor)
August 4, 2008... From Martin Reynolds It's good to see that some things don't change. The start of each quarter always brings Richard Griffiths' appointed representatives league table and with it the normal AR/DA smokescreen (Mortgage Strategy July 14)....

LETTER: Law firms shape up poorly compared with brokers.(Letter to the editor)
August 4, 2008... From Brian Hill I was surprised by Paul Marsh's holier than thou stance when comparing brokers with solicitors (Mortgage Strategy July 28). For a number of years I worked with more than 120 law firms on the government's National Land...

LETTER: Money Advice Trust resource is not aimed at consumers.(Letter to the editor)
August 4, 2008... From Jim Fearnley I read with interest Mike Culhane's recent analysis piece entitled 'It's all about quality advice not quantity' (Mortgage Strategy July 21). Culhane describes the Money Advice Trust's new online resource as being...

LETTER: NR's top priority should be to pay back the Treasury.(Letter to the editor)
August 4, 2008... From Danny Lovey It's disgraceful that Northern Rock is being allowed to tout for new business at taxpayers' expense as well as that of borrowers who can't leave it because of tough criteria. These customers, particularly Together...

LETTER: Trying to get a mortgage offer from BoI is a funny old game.(Letter to the editor)
August 4, 2008... From Will Mansfield I am writing with regard to my recent frustrating dealings with Bank of Ireland as a packager. In mid-June I submitted two buy-to-let cases to BoI for the same client. He wanted to buy two properties in Scotland...

MPC: Shadow MPC.
August 4, 2008... Although the mortgage market could do with a fillip, inflation remains too high for a base rate cut so Mortgage Strategy's GE Money Home Lending Shadow Monetary Policy Committee is unanimous in its decision to hold the rate this month ...

COVER: Angelo Rising.
August 4, 2008... From humble origins Angelo Mozilo rose to become the king of the US mortgage industry. In this exclusive extract from Chain of blame, Paul Muolo and Mathew Padilla chart the rise and road to ruin of Countrywide's boss"There is a certain amount...

COMMENT: Shape up to new market or ship out.
August 4, 2008... Kevin Paterson takes a weekly peek at the latest developments in the market and brings you what's hot and what's not in the world of mortgages Desperate times call for desperate measures, or so the saying goes. As we are seeing from the...

COMMENT: Hidden effect of brokers' decline.
August 4, 2008... Sir James Crosby's interim report on mortgage finance, published last week, stated that there's no quick fix for the mortgage market and that the credit crunch could continue until the end of 2010. The report was widely covered by the...

COMMENT: Taking the back office to the future.
August 4, 2008... The goal of straight-through processing will not be achieved until more companies invest in advanced systems to automate their back office operations, says Nick Berry Many big players in the mortgage market are investing heavily in front...

COMMENT: Brokers need help, not campaigns.
August 4, 2008... Networks should give up their fruitless campaign against dual pricing and instead focus on helping members adapt to life in the new mortgage landscape, says Gemma Harle There's a lot of pent-up frustration in the mortgage market....

COMMENT: Your shout - 04.08.08.
August 4, 2008... Question: My client owns a flat with her sister which is valued at #180,000. The mortgage is around #110,000. My client earns #41,000 a year and her sister earns #25,000 as a contractor. They are on a sub-5% Northern Rock fixed rate that ends...

COMMENT: Mutual's BDMs must fight our corner.
August 4, 2008... Nationwide has introduced a number of BDMs to foster its relationships with brokers but they must be more feisty and look out for our interests if they want our business, says Sue Read I have some sympathy for Nationwide's BDMs. There...

COMMENT: Super-prime could be next on the list.
August 4, 2008... Even seemingly recession-proof parts of London are witnessing falling house prices. Super-prime locations such as Mayfair have avoided the drop but how long will it last, asks Simon White We may be entering an age of great opportunity but...

COMMENT: Brokers look ahead with confidence.
August 4, 2008... Feedback from our round table events shows that although brokers feel bruised by dual pricing they are proactively looking at new ways to replace lost income, says Sally Laker Many of the large exhibition stand-based events that have been...

COMMENT: Advice is crucial as house prices fall.
August 4, 2008... With many market commentators experts making gloomy predictions about house prices, brokers are well placed to help nervous borrowers make the right decisions, says Mark Harris Hardly a week goes by without another survey declaring the...

COMMENT: Restoring liquidity is the only answer.
August 11, 2008... It's been another bad week for the mortgage market. After hints that the Treasury might postpone Stamp Duty, this quickly and predictably turned into a spectacular own goal. The Sun revealed that temporarily scrapping Stamp Duty was a key...

IN BRIEF: RBS reports #690m loss.(Financial report)(Brief article)
August 11, 2008... The Royal Bank of Scotland has reported a pre-tax loss of #691m for the first half of 2008 - a fall widely reported as the second-biggest loss in UK banking history. The figure represents a huge drop from the #5bn profit it made in the first...

IN BRIEF: Repossession cases on the rise.(Brief article)
August 11, 2008... There were 18,900 cases of lenders repossessing property in the first half of 2008, data from the Council of Mortgage Lenders reveals. This figure compares with 13,400 in the second half of 2007 and 12,800 in the first half of that year. The...