Mortgage Strategy articles from March 2009

Mortgage Strategy archives from March 2009

COMMENT: Stars shine in the darkness.
March 2, 2009... 2008 was probably the toughest year many in the mortgage sector have experienced. With the wholesale markets closed, lending has pretty much ground to a halt and the impact on firms in the intermediary sector has been challenging to say the...

NETWORKS: L&G and MT partner up to bag 15% market share.
March 2, 2009... Legal & General can lay claim to a 15% share of the mortgage market as it formalises a trading partnership with the UK's biggest mortgage network Mortgage Times today. Mortgage Times will remain a separate network regulated by the...

BANKS: Mortgage arrears in Lloyds group leap 44%.
March 2, 2009... The level of arrears on Lloyds Banking Group's mortgage book rose 44% in the past year, its full-year results reveal. Lloyds Banking Group blames the rise on the economic slowdown and higher unemployment, but says it remains confident...

RECRUITMENT: L&C looking for 10 more advisers.
March 2, 2009... London & Country is embarking on a recruitment drive that will take its sales force to over 170. The brokerage is looking for another 10 advisers, after taking on 12 in January. L&C plans to put recruits through an intensive induction...

BANKS: RBS pledges to boost lending by #9bn this year.
March 2, 2009... The Royal Bank of Scotland has promised to boost mortgage lending by #9bn this year in exchange for its participation in the Treasury's Asset Protection Scheme. RBS will siphon #325bn of toxic assets into the scheme and receive an extra...

BROKERS: Cobalt silent on strife rumours.
March 2, 2009... Cobalt Capital last week refused to be drawn on rumours of internal strife at the firm. A source has revealed that there is a serious split between the senior management team and some of the business' owners. But Andrew Montlake,...

BUILDING SOCIEITS: Unfair FSCS levies could plunge societies into red.
March 2, 2009... Hefty levies to the Financial Services Compensation Scheme could mean many societies report losses this year, according to the Building Societies Association. Several societies have already revealed substantially lower profits for 2008...

REGULATION: FSA considers taking control of mortgage products.
March 2, 2009... The Financial Services Authority looks set to wade in on product regulation and may be considering setting maximum LTVs. Appearing before the Treasury Select Committee last week Lord Turner, chairman of the FSA, indicated that the...

STRAW POLL: Brokers scoff at Lib Dems' deal.
March 2, 2009... Just 31% of Mortgage Strategy Online readers believe the Liberal Democrats' proposal to introduce five-year fixed rate no-frills mortgages is feasible. The remaining 69% clearly believe that a stable mortgage offering will have to be more...

Recession hits surveyors as two big firms go into administration.
March 2, 2009... Surveyors are emerging as the latest victims of the credit crunch, with two major companies being placed into administration in a week. Ashdown Lyons filed for administration on February 20 and 60 staff were made redundant with immediate...

Dual pricing is no longer a threat to brokers, says AMI.
March 2, 2009... The Association of Mortgage Intermediaries says dual pricing no longer poses a serious threat to the broker market. Robert Sinclair, director of AMI, says that although dual pricing still exists, lenders have been moving towards a more...

PROTECTION: Flexible PPI product launched.
March 2, 2009... Payment protection insurance provider MMS has launched a product designed to address some of the criticisms aimed at the sector by the Competition Commission. In January the CC hit out at the industry for not having enough competition and...

LENDING: Mortgage approvals rose in January.
March 2, 2009... Latest figures from the British Bankers' Association show the value of mortgage approvals increased from #7.3bn in December 2008 to #7.6bn in January 2009. In terms of the number of loans taken out, this equates to a 1,230 rise from...

IN BRIEF: FSA tells MPs that bank supervision will improve.(Brief article)
March 2, 2009... Lord Turner, chairman of the Financial Services Authority, admitted to MPs last week that in retrospect the supervision of banks such as HBOS was wrong. But he told the the Treasury Select Committee that "it will be fit for purpose, given...

IN BRIEF: OFT probes firms' links with estate agents.(Brief article)
March 2, 2009... The Office of Fair Trading has launched a study into the relationship between estate agents and other parties in the house buying chain, including mortgage brokers and surveyors. Copyright: Centaur Communications Ltd. and licensors

Mortgage Brain ponders further acquisitions after buying Encore.
March 2, 2009... Mortgage Brain says it is considering making further acquisitions after snapping up Mortgage 2000's Encore sourcing system last week. Mark Lofthouse, chief operating officer of Mortgage Brain, refused to be drawn on the type of...

CLAIMS MANAGEMENT: Claims firms welcome crackdown.
March 2, 2009... The Ministry of Justice's move to clamp down on dishonest ambulance chasers has been welcomed by the claims industry. Justice minister Bridget Prentice has warned that if claims management firms make false assertions in their advertising...

SUB-PRIME: Labour urged to help sub-prime.
March 2, 2009... The government was last week urged by the Intermediary Mortgage Lenders Association to help fund sub-prime lenders. IMLA's latest survey shows that just 4% of the mortgages sourced by intermediaries in Q4 2008 were sub-prime. But...

IN BRIEF: 50% more borrowers are making overpayments.(Brief article)
March 2, 2009... The number of home owners making overpayments on their mortgages has gone up by 50% in the past year, figures from Co-operative Bank Mortgages reveal. Copyright: Centaur Communications Ltd. and licensors

IN BRIEF: Law firm offers clients refunds on their HIPs.(Brief article)
March 2, 2009... Liverpool-based solicitor Paul Rooney Partnership is offering to refund clients the cost of their Home Information Packs when their house sales complete. Copyright: Centaur Communications Ltd. and licensors

ANALYSIS: Marketwatch - 02.03.09.
March 2, 2009... It's good to see firms such as Checkmate and Exact using their initiative in this challenging market to branch out and offer services other than lending Swaps didn't move a great deal last week. There was a small increase for longer term...

ANALYSIS: We must return to basic underwriting.
March 2, 2009... Amid the recriminations and buck passing of recent weeks, little attention has been paid to the lessons that need to be learnt from the mess we are in. There are going to have to be some changes - one of which should be the reliance on...

ANALYSIS: This could be the return of the MIG.
March 2, 2009... At last, some joined-up thinking from the government was seen last week with an announcement that Northern Rock would start lending again. This is a significant statement of intent that says the government is prepared to use taxpayers'...

ANALYSIS: Ensure families are taken care of.
March 2, 2009... As reality TV star Jade Goody faces the tragic realisation that she has terminal cancer, her main focus is on her children who now face a future without their mother. With the time she has left, Jade has decided to raise as much money as...

ANALYSIS: Seek some help to get back on terra firma.
March 2, 2009... With all firms in the mortgage sector affected by the downturn, The Beatles' plea for Help resonates today now more than ever before. When advisers were younger many "never needed anybody's help in any way," to quote the Fab Four. But many...

ANALYSIS: Ban on 100% deals is ridiculous idea.
March 2, 2009... Oh dear, Labour's latest hair-brained solution to save us from ourselves appears to be outlawing the 100% LTV mortgage for good. And, apparently, Gordon Brown's asked the Financial Services Authority to come up with how to do it. As they...

ANALYSIS: Product design is rarely the problem.
March 2, 2009... The national press seems to be predicting that the Prime Minister is about to instruct the Financial Services Authority to ban 100% LTV lending. The idea is meant to symbolise a new era of responsible lending. But I have serious concerns...

ANALYSIS: Retrain in comfort of your own home.
March 2, 2009... If I told you about something that has the potential to boost your business, but won't cost you anything, would you be interested? I'm talking about online seminars, which give you the chance to learn new selling techniques and brush up on...

ANALYSIS: Savvy brokers will leap into IFA-land.
March 2, 2009... There has been much talk of mortgage advisers diversifying to stay in business and there is evidence of forward-thinking brokers doing just that, resulting in Premier Mortgage Service changing its name to PMS last month to accommodate...

ANALYSIS: Brown takes his prayers to the Pope.
March 2, 2009... Prime Minister Gordon Brown's recent audition with the Pope teased my febrile brain. Was it just something one does as a Prime Minister visiting Rome? His predecessor Tony Blair had done something similar, but he then went on to...

ANALYSIS: Societies always lend prudently.
March 2, 2009... Last week Prime Minister Gordon Brown called for a blanket ban on 100% mortgage lending. Sensible, some may think, but a step too close to a nanny state, according to others. Underneath the headlines was a comment I found interesting....

ANALYSIS: Don't forget your high-end clients.
March 2, 2009... On speaking to industry contacts it is clear, and not that surprising, that an air of pessimism exists in the mortgage market. I guess this is unavoidable and almost inevitable as all sectors in our industry are feeling the strain that...

ANALYSIS: E-conveyancing will not happen overnight.
March 2, 2009... I was recently asked for an update on the Land Registry's e- conveyancing initiative. My enquirer pointed out that having heard a fair amount in 2007 and early 2008 about the Land Registry's intention to revolutionise the conveyancing system,...

IN MY OPINION: Going boldly down the road to nowwhere.
March 2, 2009... Kevin Paterson Sales and Marketing Director Assurant Intermediary Ever the master of the empty sound bite, Prime Minister Gordon Brown recently took the imaginative step of proposing to ban 100% LTV mortgages which, astute readers will...

COMMENT: Easy answers to complicated questions.
March 2, 2009... This must be the season for sound bites about mortgages. If it was possible to be more out of touch than Labour, the Liberal Democrats added their irrelevant voice to the debate by announcing that if it was up to them they would introduce a...

COMMENT: Go figure.
March 2, 2009... When is bad news good news? When the news is better than predicted. This was the clutching-at-straws announcement by the Council of Mortgage Lenders, which stated that while repossessions in 2008 hit 40,000, marking a 54% rise compared with...

LETTER: I'm quitting because of unnecessary regulation.(Letter to the editor)
March 2, 2009... I am throwing in the towel as a mortgage and insurance adviser following decades of unnecessary regulation. I have always insisted that advisers should not be strictly regulated but that products and providers should, to avoid mis-selling....

LETTER: Government got us into this mess and now it must fix it.(Letter to the editor)
March 2, 2009... Many suggestions have been made on how to resolve the credit crunch, but we think we have the definitive answer. First, let's be clear that the government, via the Financial Services Authority, is responsible for the situation. The...

LETTER: Regulator costs us a fortune but lets banks off lightly.(Letter to the editor)
March 2, 2009... From time to time Mortgage Strategy publishes readers' letters that refer to the FSA. In almost all cases the writers prefer to remain anonymous, presumably to avoid the ire of the regulator. I too fall into this category. Why is the...

LETTER: Some lenders are kicking brokers while they're down.(Letter to the editor)
March 2, 2009... I support the sterling efforts of the Association of Mortgage Intermediaries in fighting brokers' corner at this tough time. But despite AMI's complaints, dual pricing is still going on. In fact, it seems all the shouting has fallen on...

LETTER: Barclays appears to be playing cat and mouse game.(Letter to the editor)
March 2, 2009... The system of booking funds at Woolwich has become almost impossible to use. Having seen a client on Monday evening, I duly signed up for a flexible offset tracker mortgage. Tuesday morning came and within 25 minutes all the lender's...

LETTER: There are plenty of sourcing systems to choose from.(Letter to the editor)
March 2, 2009... I read with interest your article regarding Moneysupermarket.com closing its Encore system and moving brokers to Mortgage Brain (Mortgage Strategy Online). I'm sure that the DA brokers who used Encore will look for alternative systems...

LETTER: Go to court to get the commission networks owe you.(Letter to the editor)
March 2, 2009... There have been several letters in Mortgage Strategy recently about money owed to brokers not being paid, some wondering what can be done to secure payment. I experienced a similar situation some years ago when I completed a project for a...

FEATURE: Tough on crime.
March 2, 2009... The FSA's hard-hitting stance on mortgage fraud has been welcomed by brokers who believe it's about time the regulator bared its teeth and rid the sector of rogues As the old adage goes, you wait ages for a fraud case and then three...

FEATURE: Caution is the watchword.
March 2, 2009... Tracy Harvey-Bussell Business relations consultant The Consulting Consortium Helicopters, offshore honey pots, Sir Allen Stanford, Bernard Madoff, mortgage fraud, self-cert, boiler rooms and market abuse have all contributed to making...

FEATURE: Most cases involve organised rings of professional fraudsters.
March 2, 2009... Gillian Tait director Competent Adviser With the news that nearly 70 mortgage brokers face legal action after being investigated by the Financial Services Authority, mortgage fraud - and in particular, the role of brokers in this - is...

FEATURE: Introduce steps to monitor risk.
March 2, 2009... Anthony Morrow partner Paradigm Group The continuing interest and activity by the Financial Services Authority in the mortgage intermediary sector shows no sign of letting up and the indications are it could even intensify. Most...

SHADOW MPC: MARCH 2009.
March 2, 2009... This month's decision: hold Melanie Bien Director, Savills Private Finance Decision: Hold There's not much room left for the Monetary Policy Committee to manoeuvre with the Bank of England base rate at 1%. Indeed, further cuts in...

COMMENT: Get Cable in as he's the best man for the job.
March 2, 2009... Gordon Brown should get shadow chancellor Vince Cable to cross the political divide and join his Cabinet It was good to hear Gordon Brown telling the world that 100% mortgages were to be clamped down on. The only problem with that...

COMMENT: Economic review shows optimism for a 2010 recovery.
March 2, 2009... The UK will have ample resources and fewer restraints by next year as materials have been stockpiling At the Bank of England's recent economic review, which was held by Peter Andrews and Roger Beales, the outlook was upbeat for recovery....

COMMENT: We can't blame it all on the bonus culture.
March 2, 2009... The bonus structure needs reform, but scrapping what's been promised would penalise the poorest paid foot soldiers Reward for failure has become a phrase for our time. But in the hysteria surrounding the bonus culture, the facts are being...

COMMENT: Lenders seizing the balance of power in market.
March 2, 2009... Lenders seem to be using tough conditions in the mortgage sector to seize control and secure their own future While networks, brokers and house buyers have used the hiatus in mortgage activity to strengthen their position for competitive...

Curriculumvitae: Clare Barker.
March 2, 2009... Clare Barker, chairman, Equity Release Solicitors Alliance Speak up... Describe your current job I am chairman of the Equity Release Solicitors Alliance, which formally launched this January as a portal and enables intermediaries...

The week in numbers: 02.03.09.
March 2, 2009... 80% of young adults believe they can be financially independent while still receiving financial support from their parents. A report by The Children's Mutual and the Social Issues Research Centre shows financial assistance towards university...

COMMENT: Brokers still have options.
March 9, 2009... The government's decision to cut the base rate to 0.5% was another nail in the coffin of the remortgage market. With SVRs hitting the floor, for many borrowers the simplest option is to do nothing. So it's hardly surprising that many...

Shared ownership could be the new sub-prime.
March 9, 2009... Some lenders are starting to classify shared ownership mortgages as sub- prime as borrowers begin to staircase down instead of up, the Communities and Local Government Committee has warned. As part of its Housing and Credit Crunch report,...

LENDERS: Woolwich pledges to improve funds system.
March 9, 2009... Woolwich has vowed to work with brokers to improve its fund booking service and overcome delays on getting through to its funding desk. Frustrated brokers have contacted Mortgage Strategy after trying to book funds through Woolwich's...

LENDERS: Stockton gets top sales job at Lloyds.
March 9, 2009... Nigel Stockton has been made sales director of mortgages at Lloyds Banking Group. Stockton was previously managing director of HBOS Intermediaries, but he now has control of all intermediary mortgage brands at Lloyds Banking Group. ...

BROKERS: Brokers may call it a day as FSA fee deadline looms.
March 9, 2009... The industry is braced for more mortgage brokers to leave the market as the deadline looms for them to cancel their permissions with the Financial Services Authority. Firms are due to pay their annual fees to the regulator on March 31...

Lenders urged to credit borrowers on trackers below the base rate.
March 9, 2009... Borrowers on tracker deals lower than the base rate should have their mortgage accounts credited by lenders, says industry pundit Ray Boulger. As the base rate edges close to zero, some borrowers with rates below base are in the enviable...

SECURED LOANS: Cattles' woes drag two firms down.
March 9, 2009... Magic Loans and 1st Stop Finance have become the latest casualties of the troubles at lender Cattles. The secured loan brokerages have been forced to close after being hit hard by Cattles' decision to cease new lending through its...

STRAW POLL: 60% Shun shared equity schemes.
March 9, 2009... The majority of Mortgage Strategy Online readers - 60% - have yet to place a client on a shared equity scheme. The remaining 40% say they have tapped into the government's allotted #775m for social rented housing and shared equity...

HIPS: Buyers still not sold on HIPs.
March 9, 2009... Conveyancers have called on the government to abolish Home Information Packs after a report by the Department for Communities and Local Government showed the packs are still not working. The DCLG's annual report reveals that only 40% of...

BROKERS: First Action recruits to handle Hamptons mortgage referrals.
March 9, 2009... London-based First Action Finance recruited almost 20 brokers last week after it was revealed as Hamptons International's preferred referral partner for mortgages. At the beginning of the year Hamptons revealed that it was looking to...

ARREARS: Sub-prime sector sees 29% arrears.
March 9, 2009... Sub-prime arrears in the UK rose to 28.6% in Q4 2008 from 25.1% in the previous quarter, a report from Standard & Poor's reveals. The report from S&P Ratings Services shows that arrears of more than 90 days stood at 12.5% compared with...

REPOSSESSIONS: Rock repossession stock leaps 63%.
March 9, 2009... Northern Rock's number of unsold repossessed properties rose by a massive 63% in a year, its annual results reveal. The nationalised lender saw its stock of repossessed homes rocket from 2,215 in 2007 to 3,620 last year. Its Together...

IN BRIEF: London plans to build 2,900 homes for FTBs.(Brief article)
March 9, 2009... London mayor Boris Johnson and the Homes and Communities Agency are planning a #135m investment to build 2,900 affordable homes in the capital for first-time buyers. Copyright: Centaur Communications Ltd. and licensors

IN BRIEF: Call for FSA to oversee second charge loans.(Brief article)
March 9, 2009... The Association of Finance Brokers has called on the Treasury and the Department for Business, Enterprise and Regulatory Reform to pass responsibility for the regulation of second and subsequent charge loans to the Financial Services...

IN BRIEF: Trade bodies want your response to FSA fee plan.(Brief article)
March 9, 2009... The Association of Independent Financial Advisers and the Association of Mortgage Intermediaries last week issued a joint statement calling for members to respond to the Financial Services Authority's fee proposals. Copyright: Centaur...

Brokers are not taking advantage of shared equity opportunities.
March 9, 2009... Brokers may be missing out on the opportunity to capitalise on shared equity schemes. Shared equity and shared ownership schemes are available in partnership with the government, housing associations and developers. But some lenders...

MS AWARDS: Awards ceremony raises #3,000 for children's charity.
March 9, 2009... A whopping #2,980 was raised for children's charity CLAPA by attendees at the Mortgage Strategy Awards at the end of last month. CLAPA was Mortgage Strategy's chosen charity to benefit from the night. Established in 1979, it provides help...

MORTGAGES: HSBC sees mortgage sales up 200%.(Financial report)
March 9, 2009... Full-year results from HSBC reveal that its Rate Matcher campaign pushed up mortgage sales by 200%, with total new mortgage sales hitting #17.1bn. New mortgage sales for the banking giant shot up dramatically from #9.1bn in 2007. It claims...

CLAIMS MANAGEMENT: Claims business not as easy as it looks, says expert.
March 9, 2009... Carl Wright, director of Cartel Client Review, says inexperienced firms looking to cash in on claims management are coming unstuck because they don't have the appropriate legal knowledge. Wright says some companies are dabbling in claims...

IN BRIEF: MPPI customers could be paying too much.(Brief article)
March 9, 2009... Assurant Solutions Intermediary has warned that clients with mortgage payment protection insurance could be overpaying in the low interest rate environment and should consider changing their premiums. Copyright: Centaur Communications...

FRAUD: FSA banned 20 brokers last year and warns it will prosecute more.
March 9, 2009... The Financial Services Authority has revealed that it banned more than 20 mortgage brokers last year as part of its campaign to crack down on fraud. The latest broker to be named and shamed is Wakefield-based adviser Mohammed Ahmed, who...

ANALYSIS: Marketwatch - 09.03.09.
March 9, 2009... It will be interesting to see what happens to swaps now the base rate is so low, although the monthly changes are becoming increasingly irrelevant Swaps had another mixed week. Short-term money is still falling whereas longer term rates...

ANALYSIS: More base rate cuts will achieve little.
March 9, 2009... With the Bank of England base rate at a historic low the cost of mortgage finance would seem to imply that lenders are generating huge margins of up to 3% on prime mortgages alone. This is not true. The fly in the ointment is the cost of...

ANALYSIS: Lenders brace for repossessions rush.
March 9, 2009... The pre-action protocol that came into force last November gives guidance on how lenders should mitigate the chances of homes being repossessed. The protocol appears to have had some effect, with repossession claims falling by 50% from...

ANALYSIS: Firms must find a business balance.
March 9, 2009... Following the impact of the credit crunch and the subsequent recession it can be seen that the lenders facing the greatest challenges - and also the ones that found themselves especially vulnerable - are those that were over-reliant on one...

ANALYSIS: Lending boost may be good for brokers.
March 9, 2009... The recent announcement by Northern Rock that it intends to return more actively to the lending market is likely to be widely welcomed, particularly by the broker community where it has historically distributed the majority of its funds. ...

ANALYSIS: Rethink on arrears charges is needed.
March 9, 2009... The issue of mortgage arrears penalty charges has been in the media spotlight recently. There are two key questions here. First, do these charges - which range from #22 to #50 per month depending on the lender and its terms and...

ANALYSIS: Let's hope spring sees lending grow.
March 9, 2009... Spring has arrived, bringing with it sunny mornings, longer days and gardens full of bright daffodils. The big question is - will it also bring the traditional increase in home sales? This year, many interested parties will be watching...

ANALYSIS: It's time for action, not hand wringing.
March 9, 2009... Although mortgage lending and house sales are inextricably linked, the government's attempt to breathe confidence into the banking system has not stimulated new life in either. It's difficult to see the return on investment taxpayers are...

ANALYSIS: Help clients afford financial necessities.
March 9, 2009... A recent report by financial comparison website uSwitch.com indicates that it is worth remembering the old adage - look after the pennies and the pounds will look after themselves. Most of us take note of our big purchases but what about...