Mortgage Strategy articles from July 2009

Mortgage Strategy archives from July 2009

COMMENT: Building a mortgage monster.
July 6, 2009... The talk of the industry last week was the news that Sesame was in discussions to buy Bankhall, and what effect this might have on PMS and its renowned leader John Malone. The Mystic Megs of the industry have long predicted that mortgage...

FRAUD: Mounting fraud is adding to mortgage market instability.
July 6, 2009... Mortgage fraud topped #197m in the first six months of the year, with the Financial Services Authority warning that it is causing instability in the lending market. A damning report from accountancy firm BDO Stoy Hayward shows that 21...

NETWORKS: Sesame acquisition deal in weeks.
July 6, 2009... Sesame plans to conclude its acquisition of Bankhall and PMS from Skandia UK within the next six to eight weeks. The proposed deal, which was announced last week, would produce a combined appointed representative network of around 3,000...

SALE-AND-RENT-BACK: Rent-back firms' decline sparks fears of cartel.
July 6, 2009... The National Landlords Association is concerned that the dwindling number of sale-and-rent-back landlords could produce cartel-like behaviour in the sector. Interim regulation for the sector came into effect on July 1. This means landlords...

STRAW POLL: Brokers say no thanks to RDR.
July 6, 2009... The majority of Mortgage Strategy Online readers last week voted no to the Retail Distribution Review being applied to mortgage brokers. Some 68% believe it would be a bad idea compared with 32% who think it would be fine. So,...

FSA: Regulator shapes up for the future.
July 6, 2009... The Financial Services Authority has unveiled what it describes as a radical internal restructure, with several departments being brought together. From October the enforcement and financial crime sectors will form a single division...

Unscrupulous claims companies branded a cancer in industry.
July 6, 2009... Irresponsible claims firms are the cancer of the industry, says Robert Sinclair, director of the Association of Finance Brokers. Speaking at the AFB's annual dinner in London last week, Sinclair told attendees: "Claims management firms...

State-supported banks may have to sell assets to encourage competition.
July 6, 2009... The Royal Bank of Scotland and Lloyds Banking Group may be forced to sell off substantial assets to comply with competition rules. Speaking at the British Bankers' Association annual conference in the City last week, Neelie Kroes,...

PROTECTION: PPI firms knew of problems but did not resolve them.
July 6, 2009... The Financial Services Authority has condemned the behaviour of some payment protection insurance providers for knowing about problems in the sector but failing to address them. Speaking at the Association of Finance Brokers' annual...

PROTECTION: Select & Protect unveils deal to plug MPPI gap.
July 6, 2009... Select & Protect has launched a mortgage payment protection insurance product for brokers which aims to combat the withdrawal of unemployment- only cover. The MPPI product is provided by FirstAssist Insurance Services and includes full...

PROTECTION: Paymentshield changes at the top.
July 6, 2009... Paymentshield has undergone a management shake-up, with Stuart Pender becoming executive chairman and Tim Johnson replacing him as chief executive. Prior to taking the role at Paymentshield Johnson was chief executive of Cullum Capital...

PROTECTION: Consumers put their pets before pay.
July 6, 2009... More consumers have pet insurance than income protection, research from LV= shows. The firm says that despite concerns about reduced income and redundancy, one in four consumers are choosing not to take out protection and instead using...

IN BRIEF: Director of insurance brokerage is fined.(Brief article)
July 6, 2009... The Financial Services Authority has fined Richard Holmes, a director of insurance broker AIF Limited, #20,020 for control failings in relation to an appointed representative firm. Copyright: Centaur Communications Ltd. and licensors

IN BRIEF: Mutuals' gross lending fell to #1.5bn in May.(Brief article)
July 6, 2009... Gross mortgage lending by building societies fell to #1.52bn in May, down from #3.53bn at the same time last year, figures from the Building Societies Association reveal. Net mortgage lending was - #752m, down from #142m last May. ...

LENDERS: Specialist firms expected to sign up to Mortgage Scheme.
July 6, 2009... A wave of specialist lenders are poised to sign up to the Homeowner Mortgage Support Scheme, the Intermediary Mortgage Lenders Association has revealed. Speaking at a House of Commons Treasury Committee meeting on mortgage arrears and...

PRODUCTS: Easier access to funds means high LTV lending could be on up.
July 6, 2009... Lenders expect to increase the amount of high LTV lending they do by some 18% in the next three months. This is revealed in the Bank of England's recent survey on credit conditions, which also shows that in the three months to mid-June a...

BUY-TO-LET: TBMC allows advisers direct access to lenders.
July 6, 2009... The Business Mortgage Company is offering its direct-to-lender service to advisers at national IFA Positive Solutions. The service from the buy-to-let packager gives brokers free access to its sourcing and quotation system and includes...

BANKS: Big names may bid to buy Rock.
July 6, 2009... Tesco and Virgin are rumoured to be interested in buying nationalised lender Northern Rock, the Times reported last week. The report claims that the government is looking to return Northern Rock to the private sector before a general...

ANALYSIS: Marketwatch - 06.07.09.
July 6, 2009... The sad fact that just six home owners have been helped by the Mortgage Rescue Scheme shows the extent of government spin surrounding its recovery efforts Swaps had a mixed week, initially edging down before closing above the previous...

ANALYSIS: Don't write proc fees' obituary yet.
July 6, 2009... It is understandable that as IFAs take part in a debate about the Retail Distribution Review, lenders and advisers in the mortgage sector are also considering how potential changes might affect their operating environment. Much like the...

ANALYSIS: Job losses may slow housing recovery.
July 6, 2009... The Council of Mortgage Lenders' reduced forecast for repossessions in 2009 is evidence that the crisis in the housing market may be starting to ease. Lenders that may previously have gone down the route of repossession are now under...

ANALYSIS: Coordinate your marketing efforts.
July 6, 2009... In my previous columns I have tried to provide brokers with an overview of some of the difficulties involved in identifying potential equity release clients. To target these customers it is important that you have some joined-up...

ANALYSIS: Local alliances can work for all parties.
July 6, 2009... Speaking to professionals in the mortgage industry it seems that two themes are growing in importance among brokers - education and innovation. Brokers need to educate themselves about related industries such as equity release and...

ANALYSIS: FSA must not curb landlords' freedom.
July 6, 2009... While the Council of Mortgage Lenders has cut its forecast for repossessions in the residential market it doesn't offer any such forecast on buy-to-let. It will be interesting to see the state of play when this quarter's figures are...

ANALYSIS: A truer picture of our boozing habits.
July 6, 2009... As the hot weather tempts many of us outdoors, there's nothing more satisfying than enjoying a glass of wine in the evening sun. But for some, drinking is wrapped up in a culture where excess is encouraged, most notably in the binge...

ANALYSIS: Seeing the value in social housing.
July 6, 2009... By the time this article is published the government should have outlined its strategy on the social housing sector, although whether it stays in power long enough to implement any proposals remains to be seen. An increased focus on social...

ANALYSIS: Stick with proven overseas locations.
July 6, 2009... Like the UK property market the overseas residential sector has been hit by the economic downturn with a severity I have not seen since I started in the financial services industry in 1980. Back then those who purchased property overseas...

ANALYSIS: B2L should always have been regulated.
July 6, 2009... Should buy-to-let be regulated or not? It's a question that has been rumbling on since Mortgage Day and I have the same view now as I did then. I believe buy-to-let should always have been regulated because to not regulate it was in...

ANALYSIS: Wimbledon jollies court controversy.
July 6, 2009... As we revelled in the rare treat of a sun-drenched Wimbledon last week and the nation salivated in anticipation of Andy Murray rising to meet the weight of expectation on his shoulders the first question on everyone's lips was - will he or...

ANALYSIS: A joint effort could restore the market.
July 6, 2009... More positive vibes have been emanating from property-watchers in recent days. Property investment firm Assetz says indicators suggest we have passed the bottom of the house price curve and a Royal Institution of Chartered Surveyors poll...

ANALYSIS: Red tape must not restrict cover firms.
July 6, 2009... I suspect that few professionals working in the financial services industry did not welcome the moves seen in recent years to provide clients with greater transparency and treat them fairly. The Financial Services Authority's Treating...

LETTER: Let brokers play on a level playing field with lenders.(Letter to the editor)
July 6, 2009... I am writing in response to the recent letter from Ian Crampton, sales director at Ferndown Limited (Mortgage Strategy June 15). As a whole-of-market broker I use a mixture of proc fees and client fees to provide my professional...

LETTER: Abbey tried to hide behind a disclaimer on one of my cases.(Letter to the editor)
July 6, 2009... Two cases I recently submitted to Abbey stand out as the only ones I can remember where affordability was flagged up as an issue when the loan amount was less than twice the main earner's basic salary. Both cases passed through the...

LETTER: Join my protest against Halifax's commission move.(Letter to the editor)
July 6, 2009... After the shock of feeling let down by Halifax's decision to pay vastly reduced commission with regard to product transfers above certain LTVs, I first thought this was just another nail driven into the coffin of brokers and shrugged. ...

LETTER: FSA should tell lenders to allow clients to switch.(Letter to the editor)
July 6, 2009... I was interested to read that the regulator is taking an interest in arrears handling (Mortgage Strategy June 29). I have a number of clients who have approached their lenders to ask if they can switch to interest-only deals for a period,...

LETTER: Bring the wisdom of Aristotle to your recruitment efforts.(Letter to the editor)
July 6, 2009... Aristotle is famous for many things but perhaps one of his lesser known achievements is observing that we are what we repeatedly do, so excellence must not be an act but a habit. Look at brokers. While many are equipped with the technical...

LETTER: FSA boss turning down his bonus is a heartening sign.(Letter to the editor)
July 6, 2009... Far be it from me to suggest that the great and good at the FSA read Mortgage Strategy and pay attention to smaller firms' representatives like myself. But I must admit I was amused to note that following the publication of my letter in...

SHARIA-COMPLIANT: Keep the faith.
July 6, 2009... Sharia-compliant financial products allow Muslims to stay true to their beliefs and some pundits believe conventional banks could learn from Islamic lenders' low-risk model The watchword for lenders at the moment is undoubtedly risk. The...

SHARIA-COMPLIANT: Islamic finance has a big future.
July 6, 2009... Nusrat Janjua marketing director Islamicmortgages.co.uk The Islamic mortgage market has decreased in size by about 35% since last August and I envisage that it will continue to fall and mirror what is happening in the conventional market,...

SHARIA-COMPLIANT: Government wants UK to be hub of Islamic finance.
July 6, 2009... Rashid Khaliq director Islamic Financial Solutions The principles behind Islamic finance have to be in line with Sharia law. The fact that interest is completely forbidden means Islamic Institutions have avoided the money markets that...

SHARIA-COMPLIANT: Key terms in Islamic Finance.
July 6, 2009... Ijara Ijara is a form of leasing. It involves a contract whereby the bank buys and then leases an item such as a consumer durable to a customer for a specified rent over a specific period. The duration of the lease as well as the basis for...

MPC: SHAWDOW MPC.
July 6, 2009... This month's decision: hold Melanie Bien Director, Savills Private Finance Decision: Hold There has been some good news since the last Monetary Policy Committee meeting. Bank of England data shows further steady signs of...

COMMENT: Thumbs down to the lenders that are getting tough.
July 6, 2009... Despite all the talk about flexibility it seems lenders are adopting a stricter attitude in their underwriting There has been much comment recently about the need for lenders to show flexibility and, dare I say it, generosity in their...

COMMENT: Even the French don't call dead ends cul de sacs.
July 6, 2009... The property sector is keen on pretension, using many words and phrases derived from foreign languages If this sounds racist I'm sorry but I don't much care for our neighbours over the channel, and nor do most of you. Why, for...

COMMENT: Lenders should look more kindly on first-timers.
July 6, 2009... Now that house prices are stabilising it's time lenders offered products to help FTBs onto the property ladder The decline in the number of first-time buyers shows how difficult it is to obtain finance at the moment unless you have a...

COMMENT: Guidelines on buy-to-let lending must be sensible.
July 6, 2009... FSA guidance on buy-to let deals could deter buyers while ignoring fundamental issues surrounding criteria The Financial Services Authority recently published a consultation paper featuring guidance to building societies that have...

COMMENT: Horrors of the recession become clear.
July 6, 2009... As the economic fog lifts it is becoming clear just what a mess the banking industry is in. Figures from the Office for National Statistics show the recession is even deeper than we thought - and it started over a year ago. National income...

COMMENT: CML should be ashamed of holding conference in secret.
July 6, 2009... The British Bankers' Association put on an amazing show at its annual conference at the Merchant Taylors Hall in the City last week. The event attracted all the big industry hitters you might expect such as HSBC group chairman Stephen...

60 seconds with Adrian Coles.
July 6, 2009... Adrian Coles director-general Building Societies Association Mortgage lending by building societies is depressed - #1.5m in May compared with #3.5m at the same time last year. Do you expect it to remain so? I think lending will...

MEDIA SPOTLIGHT: The Storm.
July 6, 2009... The Storm by Vince Cable The man regarded as one of our top economic commentators gives us his insight into what caused the credit crunch in his book The Storm - The World Economic Crisis & What It Means. Vince Cable, shadow...