Mortgage Strategy articles from December 2008

Mortgage Strategy archives from December 2008

COMMENT: Bunch of fives would help.
December 1, 2008... Chancellor Alistair Darling destroyed the rule book and came out fighting as he delivered his pre-Budget report last week, one of the most significant economic and political announcements for a generation. But there are gigantic question...

PRODUCTS: BoS to pay proc fees on product transfer deals.
December 1, 2008... Brokers received an early Christmas present from the Bank of Scotland last week when the lender said it would start paying proc fees on its online product transfer and further advance deals. The lender started the pilot scheme on Saturday...

REGULATION: Regulator is accused of mishandling TCF.
December 1, 2008... The Association of Independent Financial Advisers has accused the regulator of mishandling the Treating Customers Fairly initiative. Robert Sinclair, director of AIFA, says the Financial Services Authority has lost sight of the broader...

MORTGAGE CRISIS: Lenders ask for advice on collars.
December 1, 2008... Nationwide and Halifax have sought legal advice to confirm that the collars on their trackers are enforceable. The revelation came at the Sesame Symposium held last week in London. Nationwide and Halifax are reviewing their collar clauses...

CROSBY REPORT: Sub-zero net lending on the cards in 2009.
December 1, 2008... Net mortgage lending could plummet below zero in 2009/10 as the economic downturn continues. The Crosby report on mortgage finance, commissioned by the Treasury in April, has investigated the causes and possible effects of the credit...

INTEREST RATES: Shadow MPC advocates 1% base rate cut.
December 1, 2008... Members of Mortgage Strategy's GE Money Home Lending Shadow Monetary Policy Committee are calling for a 1% rate cut ahead of the official decision this week. The majority voted for a 1% cut as the industry grapples with the after-...

STRAW POLL: Fine lenders for collar omissions.
December 1, 2008... Most Mortgage Strategy Online readers think lenders should be fined for failing to include the details of collars in tracker products' Key Facts Illustrations. Only 10% think that lenders shouldn't be fined. Last week Nationwide and...

MORTGAGE CRISIS: Brokers told to expose fraudsters.
December 1, 2008... The National Fraud Strategic Authority is calling on mortgage brokers to blow the whistle on fraudsters operating in the market. A report from the NFSA, a government agency officially launched in September, estimates mortgage fraud losses...

MORTGAGE CRISIS: Repossessions could hit 90,000 in 2009.
December 1, 2008... Tony Ward has predicted that repossessions will reach 90,000 in 2009 as the economic crisis continues to wreak havoc. Ward, chief executive of Home Funding, says repossessions are likely to double next year as secured loan lenders call in...

DISTRIBUTION: GEMHL rejigs its distribution.
December 1, 2008... GE Money Home Lending has overhauled its distribution and terminated hundreds of direct broker agencies. The lender has trimmed its whole of market distribution to 150 brokers and packagers. Brokers wishing to do business with the lender...

MORTGAGE CRISIS: Give us the tools and we will finish the lending job.
December 1, 2008... Mervyn King has called for more tools to be given to the Bank of England to help stimulate the economy. King, governor of the Bank, says that changes to the base rate are not sufficient to get banks to lend. In a speech last week he...

NETWORKS: Network consolidation predicted.
December 1, 2008... Industry pundits are expecting rapid consolidation in the network market over the next six months. The volume of mortgages being completed is one-third of 2007's levels, but the number of networks in the mortgage market is still...

BROKERS: Provide debt advice, brokers urged.
December 1, 2008... Brokers should provide debt advice now to bolster their business in the future, a company director says. John Lukanik, director of Stafford-based Capricorn Mortgages, says he began offering debt advice to clients in January and has since...

IN BRIEF: RBS 58% state owned as investors snub shares.(Brief article)
December 1, 2008... The government now owns 57.9% of the Royal Bank of Scotland following shareholders snubbing the lender's #20bn rights issue. They bought just 0.24% of the available shares. Copyright: Centaur Communications Ltd. and licensors

IN BRIEF: Merger rules changed to protect society deposits.(Brief article)
December 1, 2008... The Financial Services Authority has modified regulations to allow merged building societies to be covered by deposit protection compensation as separate entities. Copyright: Centaur Communications Ltd. and licensors

IN BRIEF: B&W quit 90% LTV deals due to lender exodus.(Brief article)
December 1, 2008... Bristol & West Mortgages was forced to pull its 90% LTV deals in April by the exodus of other lenders from the high LTV arena. Managing director Roland McCormack says: "All lenders withdrew from 90% LTV deals so we had to do the same." ...

CROSBY REVIEW: Will Crosby's plan help the market?
December 1, 2008... The Crosby report has finally been published and the industry has spoken. Recommendations that the government guarantee mortgage-backed securities, suggestions that net mortgage lending will fall into sub- zero territory next year and...

PBR IN BRIEF: Cash for social rents and shared equity schemes.
December 1, 2008... The government has allotted #775m for social rented housing and shared equity schemes. The money will be brought forward from the 2010/11 budgets. Copyright: Centaur Communications Ltd. and licensors

PBR IN BRIEF: Millions earmarked for free debt advice.
December 1, 2008... The chancellor has pledged to make over #15m available to fund free debt advice - #5.85m for telephone charities and #10m for face-to-face advice. Copyright: Centaur Communications Ltd. and licensors

CROSBY REPORT: Crosby report calls for RMBS guarantees.
December 1, 2008... The government is set to guarantee tranches of residential mortgage- backed securities following the release of the long-awaited Crosby report on mortgage finance. Commissioned by chancellor Alistair Darling last April, the report...

CROSBY REPORT: Crosby sounds warning for future of mortgage brokers.
December 1, 2008... Brokers' share of mortgage business is set to fall and many will disappear from the market. Sir James, deputy chairman of the Financial Services Authority, issued the dire prediction in his report on mortgage finance. He says: "In...

ANALYSIS: Marketwatch - 01.12.08.
December 1, 2008... Swaps are still plummeting but trackers remain thin on the ground, which is unfair because their flexibility is what clients need as the base rate falls Swaps continued to fall rapidly last week and one-year swaps dropped below 3%. ...

ANALYSIS: It is time to unleash hell against banks.
December 1, 2008... With chancellor Alistair Darling throwing his toys out of the pram over the intransigence of UK banks, the only question is why should anyone be surprised? I think banks abandoned any sense of moral responsibility years ago and replaced...

ANALYSIS: Reasons to be cheerful in the new year.
December 1, 2008... I always smile when I hear industry pundits writing off 2009. I believe the recovery will start next year as house prices are bottoming out and the return of supply and demand will reinvigorate the market. If we look at Halifax's house...

LETTER: Brokers strangled by FSA red tape and jargon.(Letter to the editor)
December 1, 2008... You only have to read recent issues of Mortgage Strategy to realise the untenable situation most brokers are in. I'm sure a host of them are staying in the industry by default. After all, what new careers are available to those over 50 who...

LETTER: Back to the future as lenders lead bloodless coup.(Letter to the editor)
December 1, 2008... Some months ago Sir James Crosby said it would be a retrograde step if mortgage brokers were forced out of the market. He is now saying they will disappear. The reason for this is that lenders are being allowed to force them out of the...

LETTER: Brokers are looking debt solutions gift horse in the mouth.(Letter to the editor)
December 1, 2008... I read Mark Sutton's letter about embattled brokers surviving the credit crunch with interest (Mortgage Strategy November 17). We recently embarked on an email campaign targeting brokers around the UK to promote our debt solutions firm as...

LETTER: Landlords deserve fair crack of the whip from lenders.(Letter to the editor)
December 1, 2008... The base rate has dropped, LIBOR has fallen and the government wants lenders to start lending again. But this does not seem to have improved the deals available to landlords. Statistically we have been more reliable with repayments and...

LETTER: Landlords should use ARLA firms or face consequences.(Letter to the editor)
December 1, 2008... My business encompasses sales and lettings as well as financial services so I was interested to read your article about falling rents (Mortgage Strategy November 24). Until three months ago we were seeing buoyant rents inflated by the...

LETTER: Lenders that won't pass on cuts will accelerate arrears.(Letter to the editor)
December 1, 2008... I am concerned that consumers are only opting for trackers as the current wisdom is that interest rates are heading down. But clients locked into trackers with high differentials above the base rate could face severe payment shock in the...

COVER: Take that, rule book.
December 1, 2008... Forget prudence. The government's golden rule has been kicked into touch as chancellor Alistair Darling's pre-Budget report announced a package of measures to help struggling home owners and minimize the recession's effects Whoever said...

Sneaky VAT move in posturing PBR.
December 1, 2008... Most of the positive aspects of the pre-Budget report had been leaked beforehand but many of the negatives were worse than expected. For example, tipping the wink about the 2.5% VAT cut led to anticipation that the cost of fuel, alcohol and...

Darling's PBR gamble as battle lines are drawn for next election.
December 1, 2008... Alan Cleary managing director Exact Last week's pre-Budget report was more than just financial stimulus for our ailing economy. It also marked the unofficial start of the campaign to win the next general election. Of course, pretty much...

Extract from chancellor Alistair Darling's PBR speech.
December 1, 2008... Alistair Darling chancellor of the exchequer Mr Speaker, I want to take steps to improve the supply of mortgages, avoid repossessions and increase the number of new homes. Today, I can set out proposals to do this. The current...

Chancellor commits to lending boost.
December 1, 2008... Chancellor Alistair Darling has pledged to hold banks to account as he admits the government needs to do more to get lending flowing again. Facing MPs' questions at an emergency House of Commons debate on the pre-Budget report last Wednesday,...

SHADOW MPC: This month's decision: -1%.
December 1, 2008... Melanie Bien Director, Savills Private Finance Decision: -0.25% There was a massive 1.5% cut in the Bank of England base rate last month so trying to second-guess the Monetary Policy Committee is no easy task these days. But the...

COMMENT: The mortgage market is living on the edge.
December 1, 2008... Lenders, brokers and borrowers are all engaged in brinkmanship as they wait and see what the future holds With the recent rate change many consumers have suggested that things could be on the up. The thinking goes that lenders are...

COMMENT: Pre-Budget report trailer gave away the best bits.
December 1, 2008... Thanks to blanket media coverage and a rehash of old policies the report was something of an anti-climax In terms of motivating the housing market, the pre-Budget report looked like a box office flop. The 2.5% VAT cut was already chip...

COMMENT: The end is nigh for securitisation deals.
December 1, 2008... Granite's issuance of a non-asset trigger for Northern Rock mortgages is the latest sign that securitisation will not return as the government and media view it as an open invitation to reckless lending In a move that went largely...

COMMENT: Whitehall's IVA U-turn is the right move.
December 1, 2008... A simplified individual voluntary arrangement scheme designed to make it easier for debtors to reach agreement with creditors has been abandoned by the government. With the number of IVAs running at four times the level seen in 2004,...

COMMENT: Old Labour.
December 1, 2008... This week's pre-Budget report brought some positive news but I don't understand the additional tax on incomes over #150,000 a year. This is a disincentive to the entrepreneurs that chancellor Alistair Darling so often courts and will...

Curriculumvitae: Jonathan Midgley.
December 1, 2008... Jonathan Midgley, MD, Evaluate Technologies Speak up... Describe your current job As co-founder of Evaluate Technologies, an IT solution provider based in the City, my job is to design, build, test, deploy and support our...

The week in numbers: 01.12.08.
December 1, 2008... 7% more women than men own their own homes despite earning 25% less than them, a recent Fairinvestment.co.uk survey has found. The poll of more than 2,000 Britons discovered that 44% of women questioned are home owners compared with 37% of men....

COMMENT: Give lenders a chance.
December 8, 2008... It's not often we feel sorry for lenders but spare a thought for Nationwide and Halifax. They found themselves stuck between a rock and a hard place over collars last week. The Financial Services Authority argues that if collar limits...

LENDERS: Clifford given a blank slate at Virgin Money.
December 8, 2008... Rob Clifford will have the opportunity to develop a mortgage proposition from scratch when he takes the helm as managing director of Virgin Money on January 6. Clifford was appointed to the role last week, days after quitting as chief...

CML CONFERENCE: BoE killed off HBOS, claims top economist.(Conference news)
December 8, 2008... A former Monetary Policy Committee member has claimed that mis-handling of the Special Liquidity Scheme by the Bank of England was the final nail in the coffin for HBOS. Willem Buiter, professor of European political economy at the...

APPOINTMENTS: Bitner to join Just Retirement.
December 8, 2008... David Bitner, director of group partnerships at Bradford & Bingley, is leaving the nationalised lender to join Just Retirement. Bitner has been appointed head of partnership development at Just Retirement Solutions, the distribution arm of...

REMORTGAGES: Transfer fees initiative pays off for BoS.
December 8, 2008... Bank of Scotland's decision to pay proc fees on product transfer deals has been welcomed with open arms by brokers, netting the lender tens of millions of pounds of remortgage business every day last week. Nigel Stockton, managing...

APPOINTMENTS: Dudgeon returns to the mortgage marketplace.
December 8, 2008... Bill Dudgeon, ex-managing director of DB Mortgages, is returning to the mortgage market in the new year to head up lending services at IFA network Virtual Net Europe. Dudgeon will spearhead the firm's mortgage proposition and is looking...

STRAW POLL: Brokers doubt guarantee plan.
December 8, 2008... Brokers doubt the merits of Sir James Crosby's guarantee scheme for mortgage-backed securities. Last week's poll reveals that 70% of respondents believe the scheme won't work while just 30% have faith in the plan. The government has also...

REGULATION: FSA wants liquidity rules revamp.
December 8, 2008... The Financial Services Authority is recommending a shake-up of the liquidity rules for banks, building societies and investment firms. The regulator has published a consultation paper proposing that firms work to a "bespoke quantitative...

State to underwrite mortgages for credit crunch-hit borrowers.
December 8, 2008... The government is poised to underwrite the mortgages of thousands of borrowers who are struggling to keep up repayments as a result of losing their jobs. Last week Prime Minister Gordon Brown told the House of Commons that the government...

SECURED LOANS: We have a future, says AFB head.
December 8, 2008... Robert Sinclair issued a rallying call to the secured loan market at the Pancredit/Mortgage Strategy networking event in London last week. Sinclair, director of the Association of Finance Brokers, maintains that the sector will survive...

PEOPLE: Godfather turns 65.
December 8, 2008... Early birthday wishes flooded in last week for Premier Mortgage Service managing director John Malone, who is 65 today. Malone was born on December 8 1943 - the same day as The Doors' legendary singer Jim Morrison. Whereas the latter took...

MORTGAGE CRISIS: Councils may set up own banks.
December 8, 2008... Councils are considering setting up their own local banks to bridge the funding gap caused by the credit crunch. Local authorities in Essex and Birmingham are proposing to establish municipal banks to offer loans and banking services to...

MORTGAGE CRISIS: GEMHL soothes redundancy fears.
December 8, 2008... GE Money Home Lending moved to calm fears about UK job cuts last week after parent firm GE Capital said it was scaling back its mortgage business. In a GE Capital business update teleconference, the firm said it was preparing for a...

Non-performing loans tipped to be fresh source of deal liquidity.
December 8, 2008... PricewaterhouseCoopers is predicting that the trading of non-performing loans between financial institutions will replace securitisation as the way many lenders secure liquidity. In a report on consumer credit, the accountancy firm...

PRODUCTS: Sharetobuy unveils exclusive deal.
December 8, 2008... Specialist broker Sharetobuy.com has launched an exclusive deal with Britannia. The lifetime product is available at 5.1% up to 90% LTV. It features no arrangement or valuation fees and there are no early repayment charges, but it is...

INTEREST RATES: Eight lenders to pass on full rate cut.
December 8, 2008... Eight of the UK's largest lenders are passing on last week's Bank of England base rate cut of 1% to existing customers on tracker mortgage deals. Woolwich, HBOS, Lloyds TSB, Abbey, Northern Rock, HSBC, Nationwide and Britannia are...

IN BRIEF: House prices fell by 2.6% in November.(Brief article)
December 8, 2008... House prices fell 2.6% in November, says Halifax. The lender's research has found that the average house price is now #163,445 - 124% higher than in 1998. Copyright: Centaur Communications Ltd. and licensors

IN BRIEF: Haggerty quits Skipton in surprise move.(Brief article)
December 8, 2008... Steve Haggerty, managing director of Skipton, has unexpectedly quit the mutual to pursue other business interests. Skipton says: "We wish him all the best for the future." Copyright: Centaur Communications Ltd. and licensors

IN BRIEF: RBSIP sets up free broker callback service.(Brief article)
December 8, 2008... Royal Bank of Scotland Intermediary Partners has set up a free online callback service that allows brokers to book time slots to speak to the lender and resolve enquiries about their cases. Copyright: Centaur Communications Ltd. and...

Credit crunch signals the end of self-cert deals, warns economist.
December 8, 2008... A leading economist is warning that self-cert mortgages will become a thing of the past in the wake of the prevailing financial turmoil. Willem Buiter, professor of European political economy at the London School of Economics, says the...

TECHNOLOGY: Mortgages.co.uk distribution deal.
December 8, 2008... Mortgages.co.uk is about to unveil an exclusive distribution deal to promote its broker listing service with a major mortgage player. The firm launched its listing service last week, providing brokers with free directory listings on...

MORTGAGE CRISIS: Knight saw market crisis coming.
December 8, 2008... Stephen Knight, executive chairman of Checkmate Mortgages, has revealed that fears of a serious market adjustment spurred his decision to give up his former position as chairman of GMAC-RFC in April 2007. In an exclusive interview with...

MORTGAGE CRISIS: MSPs join fight to save HBOS.
December 8, 2008... Scottish MPs are supporting the Merger Action Group in its efforts to block the takeover of HBOS by Lloyds TSB, citing a threat to competition. MAG has lodged an application with the Competition Appeal Tribunal that brands the decision...

CML CONFERENCE: Rethink needed on state aid for banks, says CML.(Conference news)
December 8, 2008... Michael Coogan is calling on the government to revisit its position on state aid for banks and address the lower levels of mortgage funding that have been the unintended result. Last week Coogan, director-general of the Council of Mortgage...

IN BRIEF: Repossessions may hit 75,000 in 2009.(Brief article)
December 8, 2008... Repossessions may rise to 75,000 in 2009. The Council of Mortgage Lenders confidentially briefed MPs about the figure last week, reports the BBC. Copyright: Centaur Communications Ltd. and licensors

IN BRIEF: RBS and Rock offer six-month grace period.(Brief article)
December 8, 2008... RBS and Northern Rock have committed to a six-month grace period for borrowers facing repossession, but the latter says its foreclosures usually take 15 months anyway. Copyright: Centaur Communications Ltd. and licensors

BRIDGING: Beware fraudulent lenders, says ASTL.
December 8, 2008... The Association of Short Term Lenders is warning brokers to steer clear of unscrupulous bridging lenders that are demanding non-refundable application fees then not following through on deals. Adrian Bloomfield, chief executive of ASTL,...

CONVEYANCING: Enact slashes legal fees 25%.
December 8, 2008... Enact is reducing its legal fees by 25% to #75 as part of a Christmas offer to brokers for all remortgage cases submitted in December and January. The conveyancer says the discount is designed to ease the financial pressure many brokers...

ANALYSIS: Marketwatch - 08.12.08.
December 8, 2008... Borrowers won't do so well from last week's base rate cut as they did from the previous one as a reduced lending market doesn't have to compete on price Swaps continued to plummet but we have not seen any further improvements in fixed...

ANALYSIS: UK hasn't lost its property passion.
December 8, 2008... The idea of home ownership is ensconced in our psyche - an Englishman's home is his castle, after all. But most of our homes are not impenetrable fortresses. All too often these days consumers are being forced by harsh financial...

ANALYSIS: Financial claims can end in tears.
December 8, 2008... The problem with get-rich-quick schemes is that they rarely fulfill their promises. The idea that you can make oodles of dosh without lifting a finger has obvious appeal but obvious flaws too. If something seems too good to be true, it probably...

ANALYSIS: Calculating clients' protection needs.
December 8, 2008... Finding the right balance between need and affordability is particularly relevant in terms of mortgage insurance. If consumers have already stretched themselves to buy their homes, they may have a limited amount of money to spend on cover....

ANALYSIS: Flexible ER advice is paramount.
December 8, 2008... The severe slump in the pound's value is a sign of downward pressure affecting interest rates. If they fall further, it is possible that equity release rates will also decrease, although the two do not necessarily go hand-in-hand. If...

LETTER: We need war-war not jaw-jaw with bad banks.(Letter to the editor)
December 8, 2008... I never thought I'd agree with anything the government would say about the credit crunch but I have to support chancellor Alistair Darling's statements about holding banks to account. What they have been allowed to get away with is...

LETTER: Darling must say to lenders that enough is enough.(Letter to the editor)
December 8, 2008... It appears that the best efforts of chancellor Alistair Darling are inadequate at best. After all, government-owned Northern Rock is increasing its rates and it is not alone. Despite being bailed out at taxpayers' expense, with billions of...

LETTER: Lower LTV deals fail to give clients much choice.(Letter to the editor)
December 8, 2008... Why is everyone within the lending industry behaving like they are our saviours? I'm tired of hearing the government, the Bank of England and individual lenders shouting about how they are the ones who have helped to save the market....

LETTER: Lenders are taking the mickey and should be controlled.(Letter to the editor)
December 8, 2008... I was absolutely astounded to hear Bank of England governor Mervyn King say that it may be necessary to encourage banks to start lending to small businesses and home buyers again. What was that? Forgive me for questioning our financial...

LETTER: My client is stuck between Rock and hard place.(Letter to the editor)
December 8, 2008... My client is an existing Northern Rock customer who wished to port her flexible fixed rate deal to avoid a 3% early repayment charge. The product is competitive at 5.69%. I submitted a decision in principle request to Northern Rock on 30...

LETTER: Lenders selfishly pick and choose what TCF means.(Letter to the editor)
December 8, 2008... TCF is a daily consideration for all brokers but I have an issue with how lenders seem to decide what constitutes meeting the initiative to suit their own ends, even if it disadvantages borrowers. I have a client with a BM Solutions...

LETTER: Developers can't build new homes without funding.(Letter to the editor)
December 8, 2008... Regarding your story 'Beckett calls for house builders to keep building' (Mortgage Strategy Online, November 20). Developers have not ceased building as a matter of choice but as a consequence of lenders not releasing adequate funds. ...

COVER: Fiddling while market burns.
December 8, 2008... Sir James Crosby's report on mortgage finance calls for government guarantees to bolster funding but Whitehall won't act until next spring's Budget Chancellor Alistair Darling has so far failed to put out the fire engulfing the mortgage...