Mortgage Strategy articles from February 2009

Mortgage Strategy archives from February 2009

COMMENT: A lesson in evolution.
February 2, 2009... The mortgage market experienced a minor earthquake last week. You may not have felt it and it certainly won't have registered on the Richter scale but PMS' decision to change what the trading style stands for, from Premier Mortgage Service...

DISTRIBUTION: PMS rebrands to reflect broader business model.
February 2, 2009... PMS has ditched Premier Mortgage Service as its trading style. The famous letters now stand for Protection, Mortgages & Savings. The acronym PMS, which the company trademarked last year, will be its main trading style on all marketing...

SPECIALIST LENDING: BM Solutions and BoS desert specialist sector.
February 2, 2009... Competition in the mortgage market was dealt another body blow last week as BM Solutions and Bank of Scotland announced their withdrawal from the self-cert and sub-prime sectors. BM Solutions has also tightened LTV criteria across its...

BROKERS: Andy Wilgoss is made redundant.
February 2, 2009... Andy Wilgoss, managing director of Square Mile Mortgage Finance, has been made redundant after eight years at the helm of the brokerage. Two consultants from Square Mile and one from parent Cobalt Capital have also been laid off. ...

NETWORK: Abbey believed to be looking at networks' books.
February 2, 2009... Abbey is believed to be asking to see networks' accounts as part of a review of its mortgage distributors. Industry sources say the lender is reviewing its relationship with networks and clubs to ensure they cannot damage its reputation....

STRAW POLL: 94% Of brokers want fees probe.
February 2, 2009... An incredible 94% of Mortgage Strategy Online readers think the Financial Services Authority should investigate networks that refuse to pay their appointed representatives the commission they are owed. Just 6% - presumably networks - think...

SECURED LOANS: Prust firm could launch this year.
February 2, 2009... John Prust, former director and founder of Southern Pacific Mortgage Limited, says he hopes to launch a secured loans operation this year if the market improves. Prust says he has assembled a crack team from the secured loans and...

Call for reform of audit that lets failing lenders slip through net.
February 2, 2009... The financial crisis has exposed a flawed auditing model which allows banks to be given a clean bill of health just days before collapse. Prem Sikka, professor of accounting at the University of Essex, says the model whereby one bunch of...

BUILDING SOCIETIES: Societies' lending slump laid bare.
February 2, 2009... Net lending by mutuals totalled just #324m in December 2008 - a huge drop from the #1.01bn recorded in December 2007. Data from the Building Societies Association also reveals that gross mortgage lending fell to #2.4bn from #3.67bn in...

Paragon will curb secured loan business if it fails to get funding.
February 2, 2009... Paragon Group has until April to find new funding or it will be forced to limit its secured loan lending to existing customers. In a London Stock Exchange trading update last Thursday the firm revealed that its current funding will be...

FIRST-TIME BUYERS: First-timers seek low LTV deals.
February 2, 2009... Leadbay says first-time buyers are adapting to the low-LTV mortgage environment after noting a rise in the number of borrowers looking for deals with LTVs between 70% and 90% in the past six months. The statistics are based on more than...

EQUITY RELEASE: SHIP's membership falls to 17.
February 2, 2009... Safe Home Income Plans has lost five providers, taking the equity release trade body's membership from 22 to 17. Bristol & West, Bradford & Bingley, Stroud & Swindon, Dunfermline and Standard Life Bank have not renewed their SHIP...

IN BRIEF: B&B appoints firms to handle waiver business.(Brief article)
February 2, 2009... Bradford & Bingley has appointed The Mortgage Business and The Buy to Let Business to handle borrowers who take up its waiver on early repayment charges and redeem their mortgages. Copyright: Centaur Communications Ltd. and licensors

IN BRIEF: Unbiased.co.uk links adviser searches.(Brief article)
February 2, 2009... Unbiased.co.uk has brought its 'Find an IFA' and 'Find a mortgage adviser' online searches onto a single portal. It will soon offer solicitor searches as well. Copyright: Centaur Communications Ltd. and licensors

IN BRIEF: FSA bans adviser and shuts down firm.(Brief article)
February 2, 2009... The Financial Services Authority has banned John David Cook from giving financial advice and stopped his Liverpool-based firm, Stone Financial Management Limited, from conducting business. Copyright: Centaur Communications Ltd. and...

PPI: CC slammed for tarring MPPI sales with same brush as PPI.
February 2, 2009... The Competition Commission has been slated for banning mortgage payment protection insurance at point-of-sale and putting it in the same camp as general PPI. The CC's final report into PPI orders providers and brokers to wait seven days...

PRODUCTS: Woolwich unveils lowest fixed rate.
February 2, 2009... Woolwich has launched its lowest fixed rate mortgage at 2.29%. This is 1.5% lower than the previous rate for the same product. After one year the product tracks the Bank of England base rate plus 2.29%. It is available at 60% LTV, has...

TECHNOLOGY: Mortgage club in online deal.
February 2, 2009... Mortgage Promotions last week signed an exclusive deal to distribute Mortgages.co.uk's Premier Profile online broker listings to its members. In November Mortgages.co.uk offered brokers free listings on its website where they can upload...

IN BRIEF: Equity release lawyers get professional body.(Brief article)
February 2, 2009... The Equity Release Solicitors' Alliance has been launched. It aims to ensure that all equity release clients have access to independent legal advice. Copyright: Centaur Communications Ltd. and licensors

BUY-TO-LET: Licence plan to weed out clueless landlords.
February 2, 2009... A leading private rental expert is calling for the introduction of licences for residential landlords to cut out clueless and criminal property investors. Dr Julie Rugg, senior researcher at the centre for housing policy at the University...

OVERSEAS MORTGAGES: Overseas owners remortgage to cut sterling debt.
February 2, 2009... International Private Finance says the number of owners remortgaging their overseas properties to cut their UK debt doubled between April and December 2008. In its mortgage outlook for 2009, the international property broker says it...

BROKERS: Brokers offer advice on gas and electricity.
February 2, 2009... Mortgage brokers are branching out and starting to offer advice on gas and electricity supplies along-side mortgages, a study by Datamonitor has revealed. Rod Logan, financial services analyst at Datamonitor and author of the report,...

SECURED LOANS: Cattles asks for government aid.
February 2, 2009... Troubled lender Cattles pleaded with the government last week to include secured lenders in its loan guarantee scheme to help kick-start its lending operation. At the moment the scheme is only open to lenders that are authorised...

ANALYSIS: Marketwatch - 02.02.09.
February 2, 2009... Swaps have risen for the first time in ages and even three-month LIBOR crept up, but there's still a chance fixed rate deals will be reduced Swaps rose for the first week in months and last Wednesday three-month LIBOR edged up from 2.16%...

ANALYSIS: Lenders must fuel first-timer activity.
February 2, 2009... While the mortgage market slowed rapidly in 2008, it was by no means uniform across all market segments. Our market analysis has shown that gross lending to the highest quality borrowers in the first 11 months of 2008 was only 18% lower...

ANALYSIS: Be honest with staff in these tough times.
February 2, 2009... I received a human resources bulletin last week and some of the statistics in it were remarkable. The Chartered Institute of Personnel and Development suggests that only 26% of the firms it questioned were likely to make redundancies this...

ANALYSIS: Put a stop to these obscene bonuses.
February 2, 2009... It does seem more than a little incongruous that at a time when British taxpayers are being asked to underwrite the losses of banks' mismanagement, offenders such as Northern Rock are poised to hand staff millions in bonuses. ...

ANALYSIS: Fixed rate deals are becoming attractive.
February 2, 2009... With borrowers holding out for news that the base rate has hit rock bottom and longer term swap rates low, we are inching towards that mythical time when a five or 10-year fixed rate could suit both parties in the mortgage transaction. ...

ANALYSIS: Get to know what FTBs really want.
February 2, 2009... First-time buyers are a hot topic at the moment, with much talk of how we can encourage them into the market. So it's interesting to look at just who are first-time buyers, what do they want and how has this changed over the last six months....

ANALYSIS: MIG scheme will encourage lenders.
February 2, 2009... Whatever your political persuasion on how to maintain stability in our financial markets, the government has tried to stay ahead of the crisis with a wide range of initiatives. Some of us might have done things in a different order, but...

ANALYSIS: High LTV loans may re-energise market.
February 2, 2009... It's official - the UK is in recession. The news came in a week that began with the Prime Minister and chancellor holding a joint press conference to announce the latest fiscal stimulus to increase lending to consumers and business. ...

ANALYSIS: True cost of keeping lending wheels oiled.
February 2, 2009... The Bank of England's base rate cut to just 1.5% is a clear indication that the economy is running out of options. But who is the rate cut aimed at? Cutting the base rate won't help the lack of credit - 40% of savings accounts now pay...

ANALYSIS: Specialist lenders left out in the cold.
February 2, 2009... We know that arrears and repossessions are going to climb in 2009 and the government has been trying to reduce the impact of a lack of credit to households and businesses. But this government intervention is ignoring millions of borrowers....

ANALYSIS: Quality is much more than a name.
February 2, 2009... Recent months have shown clients that big-brand household names are also susceptible to the effects of an economic downturn. Now is the time for quality advice and this, instead of a name, will ensure long-term success. Advice is more...

ANALYSIS: Low interest rates may be detrimental.
February 2, 2009... For the last few months I have felt like I was marching to my own time rather than in step with the rest of the regiment, at least on the issue of interest rates. It seemed that every economist and politician, and even people who should...

ANALYSIS: Get clients to think of financial security.
February 2, 2009... I'm writing this on what has been labelled the most depressing day of the year, and all the doom and gloom in the world markets makes me think that the day is not going to get any better. Reading about improvements to the welfare reform...

LETTER: It's time to crack down on rogue estate agents.(Letter to the editor)
February 2, 2009... As an estate agent, I welcome any initiative that brings forward the regulation of the industry. Far too many unscrupulous operators are flouting guidelines - and even the law in some instances - and this must be stamped out. We take...

LETTER: B&B initiative is good for clients as well as taxpayers.(Letter to the editor)
February 2, 2009... I was interested to read Alan Cleary's comments (Mortgage Strategy January 19) about Mortgage Express' amnesty on early repayment charges and would like to respond. Since nationalisation, Bradford & Bingley's objective has been to reduce...

LETTER: Regulator allowed lenders to get us into this mess.(Letter to the editor)
February 2, 2009... I have been a member of a big network for the past 10 years and during that time have worked hard to pass internal exams as well as meet increasing compliance and form-filling requirements while trying to earn a living. I am now leaving...

LETTER: We may as well let Nick Leeson hand out bailout cash.(Letter to the editor)
February 2, 2009... I am aware that readers might be getting fed up of me raving on about the lack of direction some banks are receiving from their new owner UK plc, but I hope they will forgive me for mentioning the following incident. A colleague who is...

LETTER: Don't just complain about fees - change your network.(Letter to the editor)
February 2, 2009... The late payment of fees, as highlighted in last week's issue of Mortgage Strategy, is a problem for brokers struggling with cash flow due to the credit crunch. Networks sitting on fees and using them to ease their financial difficulties...

LETTER: MS should name the networks that are withholding fees.(Letter to the editor)
February 2, 2009... Mortgage Strategy was uncharacteristically coy in its leader (Clean up your act networks) and lead news story (Lender warns networks to pay brokers on time) by not naming the networks accused of holding onto brokers' fees (Mortgage Strategy...

FEATURE: Open house.
February 2, 2009... A strong but flexible business model should ensure Openwork's success even in these tough times, says the network's Paul Shearman Openwork, the brainchild of Zurich, came into being in 2005 as part of the post-mortgage regulation network...

SHADOW MPC: FEBRUARY 2009.
February 2, 2009... This month's decision: -0.5% Despite funding problems being widely seen as more important than low interest rates, the majority of the GE Home Lending Shadow Monetary Policy Committee feel another base rate cut now would give the economy...

COMMENT: Ride the secured loans wave of change.
February 2, 2009... Consumer-facing secured loans brokers are moving out of the sector, leaving a void which could be filled by mortgage advisers. And if they seize the opportunity we could see big changes in the market Whether they know it or not, mortgage...

COMMENT: Raising interest rates may be our final salvation.
February 2, 2009... A base rate hike would strengthen the pound which in turn would kick- start a chain of events to bolster the economy We had friends over last week for drinks and a good chat. It was a nice evening, lots of laughter and some informative...

COMMENT: Guarantee scheme details will be key to its success.
February 2, 2009... Without strong leadership and detailed proposals, the government's initiative will be difficult to navigate Another year, another bank bailout. But will this one be successful in doing what the previous one has failed to do and kick-start...

CURRICULUMVITAE: Eddie Hooker.
February 2, 2009... Eddie Hooker chief executive officer, Mydeposits.co.uk Speak up... Describe your current job Relentless - it involves just about everything required to run a company which employs over 70 staff. We operate an insurance-based...

The week in numbers: 02.02.09.
February 2, 2009... 25% of UK mortgage holders are worried about negative equity. A poll by Fairinvestment.co.uk shows that of these concerned home owners 11% bought their homes at the height of the property price boom which is why, as prices fall, they are...

COMMENT: This is a rate cut too far.
February 9, 2009... Some lucky interest-only customers are now paying as little as 8p a month for their mortgages in the wake of the Bank of England's 0.5% base rate cut last week. Lloyds Banking Group's Cheltenham & Gloucester brand has some borrowers on a...

Networks told to steer clear of claims firms.
February 9, 2009... Networks say lenders are putting pressure on them to avoid claims management firms. The rise in the number of claims management firms looking to recruit mortgage brokers is said to have caused unrest among some lenders, with them...

AIFA calls for probe into FSA's spending.
February 9, 2009... The Association of Independent Financial Advisers is calling on the National Audit Office to look into whether the Financial Services Authority offers value for money. The Treasury is conducting a review into the work of the FSA in 2007/08...

Broker vows to fight FSA ruling.
February 9, 2009... Beleaguered brokerage Warwick Finance last week pledged to fight the Financial Services Authority's decision to remove its permissions to carry out regulated activities. The FSA moved against Aaron Nickols, proprietor of Warwick, over...

Industry cheers regulation of rent-back sector.
February 9, 2009... The mortgage industry has welcomed the Financial Services Authority's decision to regulate the sale-and-rent-back market. In a consultation paper the regulator proposes a two-stage approach to regulation, with an interim regime being...

STRAW POLL: Brokers split on diversification.
February 9, 2009... Mortgage Strategy Online readers are divided over the future of mortgage brokers, with just 51% thinking that selling pensions and savings is the way to go. Some 49% of brokers are not for turning and say they will stick with what they...

Surveyors slammed for paranoia.
February 9, 2009... Surveyors have been criticised for being paranoid when it comes to valuing new-build property. Mortgage Strategy has been informed of a case in which a client agreed to buy a new-build property off-plan based on the developer's valuation...

AR offers to pay to get out of Network Data.
February 9, 2009... An appointed representative of Network Data is so keen to leave that he is offering to pay off the network in a bid to overturn his three-month notice period. The storm over missing commission payments shows no sign of abating and...

CEO of Standard Life Bank quits.
February 9, 2009... After seven years at the helm of Standard Life Bank, Anne Gunther last week revealed she is stepping down as chief executive officer. She will leave on February 27 and will also quit her roles as CEO of Standard Life Healthcare and...

Abbey took 28% of net mortgage lending in 2008.
February 9, 2009... Abbey revealed last week that it had a thumping 28% share of net mortgage lending in 2008. The Council of Mortgage Lenders says there was a total of #40bn net mortgage lending in 2008 and that Abbey accounted for #11.1bn. Its loan book...

Loanmakers re-emerges with new identity as chief executive buys it.
February 9, 2009... Loanmakers is the latest firm to re-emerge with a new identity after it was bought out of administration. The secured loans master broker appointed administrators last Wednesday but within 24 hours it was purchased by Ges Ratcliffe, chief...

Money Partners suspends lending.
February 9, 2009... Packagers mourned the loss of another lender last week as Money Partners slammed the brakes on new lending. The lender says it has withdrawn its products due to low demand. Packagers claim its mortgages were priced so high that it was...

Nine Woolwich BDMs to lose jobs.
February 9, 2009... Barclays plans to cut its Woolwich BDM sales force by almost a fifth as part of cutbacks across the group. The lender will retain 40 of the 49 BDMs it currently has under the Woolwich brand. Barclays has placed 300 staff into...

IN BRIEF: Zurich returns premiums to buy-to-let borrowers.(Brief article)
February 9, 2009... Zurich has returned the premiums paid by borrowers who took out its Zurich Property Deposit Guarantee Bond with Instant Access, a buy-to- let firm that has gone into administration. Copyright: Centaur Communications Ltd. and licensors

Trigold's direct deals may boost broker fees.
February 9, 2009... Trigold's plan to list direct-only products could provide brokers with a justification to charge fees for their advice. One broker, who wishes to remain anonymous, says the ability to source direct-only deals will show clients that...

Personal loan link from eMoneyfacts.
February 9, 2009... eMoneyfacts last week launched a personal loan application system for its 15,500 users. The system enables brokers to link via eMoneyfacts to Gateway2-Finance to submit prime personal loan applications online. Gateway2Finance...

IN BRIEF: Changes at the top in Intrinsic reshuffle.(Brief article)
February 9, 2009... Kevin Ronaldson, chief executive of Intrinsic Financial Services, has taken on the role of deputy chairman of the IFA network, with chairman Sandy Leitch promoted to the position of executive chairman. Copyright: Centaur Communications...

ANALYSIS: Marketwatch - 09.02.09.
February 9, 2009... Sadly, it seems likely that our partly nationalised lenders will continue to dual price as they attempt to keep business volumes at a manageable level Swaps continued to edge back up last week. Three-month LIBOR is now 2.16%. 1-year...

ANALYSIS: Opportunity knocks for canny brokers.
February 9, 2009... Market forces are giving brokers access to a wider variety of distribution channels, confirming that opportunity can be found in adversity. For example, training is now available for brokers in the fields of debt management, secured...

ANALYSIS: Market needs more high LTV products.
February 9, 2009... A number of estate agents have commented recently that they have seen small but nonetheless welcome increases in market activity since the start of the year. First-time buyers and house movers are tentatively venturing back into...

ANALYSIS: Let's show faith in AAA-rated bonds.
February 9, 2009... Securitisation has been something of a loser in the fallout from the credit crunch, with much unfair criticism being heaped on anyone involved in it. But in the UK, no residential mortgage-backed securities deal or structure has blown up...

ANALYSIS: We must beware the enemy within.
February 9, 2009... Mortgage fraud has come to the fore in the national press in the past couple of weeks, with a report by KPMG stating that #36m worth of fraud cases were brought before the courts in 2008 - up nearly 10-fold on 2007. Of course, it is no...

ANALYSIS: Don't rush back to the bad old days.
February 9, 2009... Shortly after the fall of the Berlin Wall I met the saddest man in the universe propping up a bar in a beer cellar on the east side of the city. He was fluent in German, Russian and English but as a former professor of Marxist studies he...

ANALYSIS: Signs of a recovery in buyer enquiries.
February 9, 2009... It seems that the minds of most commentators are focussed on when we will see an upturn in the housing market. I am sure this question was also on the minds of the Monetary Policy Committee when its members met last week. I'm...

LETTER: Industry must regain its pioneering spirit.(Letter to the editor)
February 9, 2009... What has happened to our industry? We used to be the adaptable face of financial services - the pioneers who didn't settle for simply not knowing how something could be achieved. We would find out how it could be done and who could make it...

LETTER: Time to treat lenders fairly is over in this dog eat dog world.(Letter to the editor)
February 9, 2009... I am a hard-working broker and believe I offer my clients fair advice that is not misleading. I'm even playing devil's advocate at the moment by telling some clients to stay on their lenders' SVRs rather than incur large fees by...

LETTER: Network Data isn't coughing up the money it owes us.(Letter to the editor)
February 9, 2009... I am writing regarding my recent correspondence with Network Data addressed to Richard Griffiths, chief executive officer of Network Data Holdings, its board of directors and Alex Cotton, chief executive officer of Network Data. The points...

LETTER: FSA inefficiency is delaying our attempt to diversify.(Letter to the editor)
February 9, 2009... I am studying for the Advanced CeMAP qualification, as are the two brokers who work for me. This is to add another string to our bow in these difficult times. I recently spoke to the FSA regarding altering our licence to incorporate equity...

LETTER: Home of Choice deal should ensure a strong future.(Letter to the editor)
February 9, 2009... I'd like to thank my network, Home of Choice, for the fantastic deal it has struck with Paymentshield and Towergate. In these uncertain times, it is reassuring that Home Of Choice has been working behind the scenes to strike a deal to...

LETTER: Lenders are getting close to clients at brokers' expense.(Letter to the editor)
February 9, 2009... Lenders are looking for quality rather than quantity, and with it more control of customers. Add in tie-in deals and, hey presto, lenders are boosting the value of their client relationships in the face of regulatory pressure. Until...

FEATURE: Good riddance.
February 9, 2009... The banning of single premium PPI has been largely welcomed but there is concern that the negative publicity surrounding it could deter consumers from protecting their mortgage payments It hasn't had the best reputation and in many ways...

Clients have been ripped off.
February 9, 2009... We welcome the report published by the Competition Commission which confirms what we said in our super-complaint that triggered the original investigation - that payment protection insurance is expensive and often unsuitable, and that lenders...

An edited extract from the Competition Commission report.
February 9, 2009... The CC has concluded that businesses that offer PPI alongside credit face little or no competition when selling PPI to their credit customers. To address the lack of competition, the CC will be introducing a package of measures to introduce...

Trade bodies are worried that consumers could be left unprotected.
February 9, 2009... Robert Sinclair director Association of Finance Brokers The announcement that the sale of single premium payment protection insurance is to be banned is disappointing but not surprising. The Competition Commission has consistently failed to...

IN MY OPINION: Timescale for new PPI regime is a cop-out.
February 9, 2009... Last month saw the publication of the final report and recommendations of the Competition Commission's inquiry into the payment protection insurance market, and it proved to be a missed opportunity. Don't get me wrong, the question of...