Mortgage Strategy articles from May 2008

Mortgage Strategy archives from May 2008

COMMENT: Don't sell brokers down the river.
May 5, 2008... The dictionary definition of a cartel is a group of businesses controlling production and marketing to avoid competing with one another. With dual pricing and more competitive mortgage rates available direct to the public, it's little...

Dual pricing crippling brokers.
May 5, 2008... Brokers are accusing big lenders of operating a cartel as a return to dual pricing sees better deals available on the high street. Mortgage Strategy has been inundated with calls and letters from brokers claiming they are seeing...

IN BRIEF: Praxis makes six staff redundant.(Brief article)
May 5, 2008... Praxis Mortgage Solutions has made six redundancies. The Birmingham- based packager cut the jobs of two BDMs and four front-end sales staff last week. Managing director Arif Darr says: "It's a case of changing the infrastructure and...

IN BRIEF: MPLC and Wave start cutting jobs.(Brief article)
May 5, 2008... Mortgages PLC and Wave have started the process of making large numbers of redundancies. MPLC told a significant number of employees that they were at risk of redundancy last week. Restructuring plans at Wave, which were revealed last week,...

IN BRIEF: Tories call for debt advice body.(Brief article)
May 5, 2008... Conservative leader David Cameron is calling for lenders to donate #50m to fund a consumer debt advice service. He says lenders should have to pay a social responsibility charge to help address the plight of borrowers who have overextended...

John Charcol heads towards a refinance.
May 5, 2008... John Charcol could be on the verge of a major refinance, with funding likely to come from current shareholders. The brokerage had hoped it would be sold when a number of investors expressed an interest in it at the start of the year. At...

Abbey brings back broker exclusives.
May 5, 2008... Abbey has assured brokers that they remain vital to its business after reintroducing mortgage exclusives via its intermediary channel. Abbey for Intermediaries is bringing back the exclusive deals it withdrew last month to help maintain...

No sub-prime lending for a year, say readers.
May 5, 2008... Some 66% of Mortgage Strategy Online readers believe the absence of sub- prime lending from the UK mortgage market will continue for at least another 12 months. A more optimistic 44% think it will return within a year. Copyright: Centaur...

Q1 sees jump in demand for drawdown products.
May 5, 2008... Equity release providers are reporting a significant rise in demand for drawdown products in Q1 2008. Both Just Retirement and Prudential last week reported large increases in sales of drawdown plans compared with last year. This is...

Stock Picker: 05.05.08.
May 5, 2008... Last week HBOS became the latest bank to announce a rights issue. The group is looking to raise #4bn through an offer of two new shares for five existing ordinary shares at 275p - a 45% discount compared with the closing price the...

IN BRIEF: Rents up by 12% in last six months.(Brief article)
May 5, 2008... Average rents have risen 4% during Q1 and 12% in the past two quarters to reach a record of more than #1,000 a month, says Paragon Mortgages. Its buy-to-let index shows that the average rent is now #12,041 annually. The lender says buoyant...

IN BRIEF: Banks overstate losses, says BoE.(Brief article)
May 5, 2008... Banks are exaggerating losses suffered in the credit crisis, says the Bank of England. In its financial stability report, the BoE accuses banks of overstating the damage they have suffered because estimates seem to include unusually large...

IN BRIEF: Tesco in online estate agent talks.(Brief article)
May 5, 2008... Spicerhaart and Tesco are talking about creating an online estate agency. Tesco will be the main distribution partner while Spicerhaart will develop the agency if plans go ahead. Copyright: Centaur Communications Ltd. and licensors

IN BRIEF: Secured lenders to get focus group.(Brief article)
May 5, 2008... The Finance and Leasing Association is to set up a focus group for secured loan lenders. It has been in discussions with a number of secured loan lenders about the possibility of starting a separate focus group. Copyright: Centaur...

Buy-to-let cash cow dries up.
May 5, 2008... The days of buy-to-let investment being seen as a get-rich-quick route are over. This warning from buy-to-let experts comes in the wake of Inside Track Seminars going into administration last week. Jeremy French, managing director of...

Lending costs passed onto borrowers.
May 5, 2008... Rocketing LIBOR is forcing lenders to pass on the high cost of lending to borrowers. Heather Scott, head of PR at HBOS Mortgages, says: "If you look at LIBOR this time 10 years ago, it was 0.13% adrift from the base rate. Now we're at...

CML expects steep fall in housing transactions.
May 5, 2008... The Council of Mortgage Lenders says it is no surprise that Bank of England figures reveal a steep decline in approvals for house purchases. Last week, the BoE revealed that the number of new mortgage approvals in March fell to a low of...

Bridging trade body will collate data for sector.
May 5, 2008... Bridging lenders have joined forces to form the Association of Short Term Lenders. The association aims to collate and distribute industry statistics and data. Adrian Bloomfield, chief executive of the ASTL, says: "We are concerned...

Financial services millionaires keep on earning.
May 5, 2008... The Sunday Times last week published its annual Rich List for 2008, kindly reminding us that even in these difficult market conditions, some individuals are still doing fine. Here, we list this year's top 10 earners in the property and...

Lenders call for EU integration rethink.
May 5, 2008... Lender trade bodies are calling on the European Commission to scrap its plan to integrate European mortgage markets. The Intermediary Mortgage Lenders Association and the Council of Mortgage Lenders say the EC's White Paper on mortgage...

FSA may clamp down on high street lenders.
May 5, 2008... High street lenders could soon be subject to biannual visits from the Financial Services Authority. Lenders classified as high impact firms may be subject to regular meetings if the FSA implements recommendations in its report on the...

IN BRIEF: Salt slashes packager panel.(Brief article)
May 5, 2008... Salt has cut its packager panel from 46 to eight. A spokesman for the lender says it made the decision after pulling out of the sub-prime market and finding it no longer needed to deal with so many packagers. Copyright: Centaur...

IN BRIEF: NR shareholders called to fight.(Brief article)
May 5, 2008... The UK Shareholders' Association is calling on Northern Rock shareholders to back its court battle to overturn the government's valuation of shares in the nationalised bank. It claims that under the government's current valuation, a holding...

IN BRIEF: Warning of further house price falls.(Brief article)
May 5, 2008... A Monetary Policy Committee member has warned that house prices may need to fall by 30% to restore a sustainable house price-to- earnings ratio. David Blanchflower issued the warning last week in a speech at the Royal Society in Edinburgh. ...

IN BRIEF: Hague to head BM savings team.(Brief article)
May 5, 2008... BM Solutions' managing director Tim Hague is to head Birmingham Midshires' savings and investments team following the recent resignation of Jason Robinson from BM. Copyright: Centaur Communications Ltd. and licensors

IN BRIEF: FSA to scrutinise packager code.(Brief article)
May 5, 2008... The much anticipated mortgage packager code is to be shown to the Financial Services Authority for feedback after once it receives the green light from packagers, which is due to happen at the end of May. The FSA will be asked to highlight...

Prices dropped 0.4% in March.
May 5, 2008... The Land Registry has revealed a 0.4% drop in house prices in England and Wales during March. It says the number of transactions also fell by 26% compared with the same period last year. This makes March the seventh consecutive month...

Brokers feel need for better advice.
May 5, 2008... Brokers are calling for more advice when it comes to sourcing and making the most out of mortgage leads. More than a third of attendees questioned at a recent round table event hosted by BDS Mortgage Group highlighted the need for guidance...

Ratings data under suspicion.
May 5, 2008... Lenders are under suspicion of providing false data to ratings agencies to affect securities portfolio ratings. A report by the International Organisation of Securities Commissions on the role of ratings agencies in the structured finance...

AMI urges BoE to focus on inflation.
May 5, 2008... The Association of Mortgage Intermediaries says the Bank of England must focus on inflation instead of using base rate reductions to stimulate house prices. AMI's recent quarterly bulletin says the BoE must not sacrifice its inflation...

IN BRIEF: MfB packager volumes up 154%.(Brief article)
May 5, 2008... The packager arm of Mortgages for Business has seen a 154% year-on-year increase in sales since March last year. March 2008 was also the packaging operation's busiest month since MfB was set up in late 2006. Copyright: Centaur...

IN BRIEF: Swift bans new broker business.(Brief article)
May 5, 2008... Swift is no longer accepting new business from brokers in the secured loans market. Reportedly it will only deal with 16 master brokers who will each have monthly quotas. Copyright: Centaur Communications Ltd. and licensors

IN BRIEF: Tie-up provides PPI solution.(Brief article)
May 5, 2008... Assurant Solutions Intermediary and the network arm of BDS Mortgage Group have got together to provide mortgage payment protection insurance. The tie-up gives BDS' brokers access to Assurant's quotation platform. Copyright: Centaur...

IN BRIEF: Former Unity sales boss joins TMB.(Brief article)
May 5, 2008... The Mortgage Business has appointed Rob Fields as BDM. The former head of sales at Unity Homeloans will be responsible for supporting the development of the firm's sales team. Fields says: "I am delighted to be working for TMB, which has a...

IN BRIEF: Meet the FSA at Manchester Expo.(Brief article)
May 5, 2008... This year's Mortgage Business Expo Manchester will feature an advice centre where delegates can meet a representative of the Financial Services Authority and discuss any queries they have concerning the regulatory system. Copyright:...

IN BRIEF: NU hikes LTVs on lifetime range.(Brief article)
May 5, 2008... Norwich Union is enhancing its range of lifetime mortgage products by increasing its LTVs on all fixed rates as well as providing a cash reserve option. The move is designed to allow clients to withdraw more equity from their properties. ...

Should mortgages be available to consumers with poor credit histories?
May 5, 2008... First-time buyers without substantial deposits and those with poor credit histories are finding it increasingly difficult to get on the property ladder. Meanwhile, leading trade bodies warned last week that sub-prime lending is unlikely to...

Recruitment firm launches feedback system.
May 5, 2008... Chase Zander is claiming to be the first company of its kind to launch an eBay-style customer service feedback forum. The mortgage recruitment specialist says Feefo, an independent customer feedback system, provides it with an online...

ANALYSIS: Market watch - 05.05.08.
May 5, 2008... Swaps fell from their dizzy heights of last week. Three-month LIBOR has plunged down 0.02% to 5.86% * One-year money is down 0.12% at 5.59% * Two-year money is down 0.04% at 5.42% * Three-year money is down 0.01% at 5.38% *...

Did new lenders relax their criteria too far to make money?
May 5, 2008... Market entrants needed liberal criteria to carve a niche in a crowded environment and had nowhere to run when the bull market turned bearish Mark Posniak is director of sales and marketing Cheval The past five years have been good for...

ANALYSIS: Give with one hand, take with the other.(Conference notes)
May 5, 2008... Last Wednesday Lending Strategy held a mortgage funding conference in Manchester to explore how the industry can tackle the credit crunch. The idea for the event had been sparked off by the lack of urgency the government showed in...

ANALYSIS: Crunch bites bacchanalian work jollies.
May 5, 2008... Rate hikes, tightening criteria, job cuts and firms going bust are not the only consequences of the credit crunch. It has also led to the decline and fall of the industry knees-up. You know there are problems when it's been months since...

ANALYSIS: We are bringing back club exclusives.
May 5, 2008... Since their inception in the mid-1990s mortgage clubs have been both revered and resented. Although initially there were questions about what work they did to justify their fees, clubs nonetheless continue to provide a valuable role as...

ANALYSIS: Stupid lending policies need policing.
May 5, 2008... Is the credit crunch all bad? Although life in the mortgage world is tough right now I can see the potential for gains from the current pain. Nevertheless, if this is going to happen the Financial Services Authority must focus more on policy...

ANALYSIS: Technology can help customers at risk.
May 5, 2008... Despite our attempts to remain positive, the UK housing market has finally succumbed to the unavoidable truth that rising repossessions are a certainty. The Centre for Economics and Business Research has predicted that the credit crunch...

ANALYSIS: Self-employed can gain from offsets.
May 5, 2008... With the new tax year underway, now's the time for brokers to focus on the self-employed to ensure they're making their money work harder for them. Offset presents the perfect vehicle to do so. It's vital that brokers with self-employed...

ANALYSIS: Fivefold benefits of prime packaging.
May 5, 2008... Any firm that was reliant on sub-prime business needs to diversify as the sector contracts to a fraction of its former size. Prime low LTV remortgaging is the new black and lenders are clamouring for low-risk business. Those that can...

ANALYSIS: Financial websites face VAT bombshell.
May 5, 2008... Just when everyone thought it was safe to pick up a trade magazine again and not read about some new aspect of the VAT exemptions debate, a Revenue & Customs tribunal has brought the issue back into focus. But this time it's not mortgage...

ANALYSIS: Brokers a key weapon in fight against ID theft.
May 5, 2008... When you go to the airport these days you'll spend a fair amount of time queuing for security checks. You have got to take off your belt and boots and be ready to look security guards in the eye and confirm that you packed your luggage...

ANALYSIS: Non-performing loan trading to grow.
May 5, 2008... As the credit crisis leaves a trail of destruction in its wake, it's inevitable that the trading of non-performing loans is going to proliferate. Lenders desperately need to sell the delinquent loans sitting on their books and wasting them...

ANALYSIS: Brokers learn to expect the unexpected.
May 5, 2008... The Bank of England's #50bn Special Liquidity Scheme offers some relief to a battered mortgage market looking for signs of hope. But it could prove to be only a glimmer and is unlikely to turn things around, although hopefully it will bring...

LETTER: Jannels' email to MS about my packager stance is wrong.(Letter to the editor)
May 5, 2008... From Kevin Friend Imagine my surprise when I learnt that Vic Jannels had written an email to Mortgage Strategy saying that I was urging packagers to shut up shop. Not only is this incorrect but his email contradicts his own self-...

LETTER: Borrowers won't get best advice if brokers are cut out of deals.(Letter to the editor)
May 5, 2008... From Gary Williams Most brokers tend to use sourcing systems such as Trigold and Mortgage Brain and the number of deals available from them has fallen because of the credit crunch. But there are online sourcing tools that clients have...

LETTER: Meeks overreacted to April's quarterly network review.(Letter to the editor)
May 5, 2008... From Richard Griffiths Regarding Barry Meeks' letter (Mortgage Strategy April 21), which refers to my article in the April 7 issue of Mortgage Strategy, first of all, in the article David Copeland was incorrectly described as marketing...

LETTER: Selling MPPI is a win-win for brokers and borrowers.(Letter to the editor)
May 5, 2008... From Sandy McPherson Recent issues of Mortgage Strategy have made it clear that brokers' revenue streams are under attack from several fronts. Tightening lending criteria have made first-time buyers an endangered species, with the...

LETTER: Brokers will quit if lenders keep stabbing us in the back.(Letter to the editor)
May 5, 2008... From Stuart Wallace Recently I received a fax from yet another lender advising me of further restrictions to the business we can source through it. This time it was Nationwide. It has done away with its base mortgage rate for new...

LETTER: AMI must act before lenders destroy the broker sector.(Letter to the editor)
May 5, 2008... An open letter to Richard Farr and Chris Cummings from Danny Lovey I've been talking to fellow brokers over the past few weeks about what's been going on in the mortgage market and we all feel angry about the way lenders are treating us....

LETTER: Lenders are abusing broker loyalty with direct bias.(Letter to the editor)
May 5, 2008... From Graeme Pringle The broker sector faces a greater and even more immediate threat than funding issues. Over the past few weeks we have seen significant price variations in favour of direct business over broker channels. I've...

LETTER: Brokers must stop whingeing and adapt to the challenges.(Letter to the editor)
May 5, 2008... From Dave Dodsworth Having spent my lunchtime hunched over the April 28 issue of Mortgage Strategy, for the first time in ages I've felt compelled to write a letter. During the brief minutes in the day when my nose is not pressed to...

LETTER: HBOS decision to cut broker deals is short-sighted.(Letter to the editor)
May 5, 2008... From Andrea Owen HBOS is being short-sighted in reducing the deals available to brokers in the current climate. Brokers are having to spend more time processing applications, with call waiting times getting longer and longer. HBOS...

LETTER: C&G joins lenders offering best deals to direct clients.(Letter to the editor)
May 5, 2008... From Russell Martin I wonder whether lenders are profiteering from the crisis in the mortgage market. The reason I ask is that a number of lenders are offering superior deals direct to consumers rather than through brokers. ...

LETTER: Underhand lenders are biting the hand that feeds them.(Letter to the editor)
May 5, 2008... From Mark Osland It seems that some lenders are biting the hand that feeds them in their efforts to dig themselves out of the hole made by the credit crunch. C&G seem to be leading the attack on brokers by offering better rates to...

AMI FIVE YEARS ON: Unity is strength.
May 5, 2008... As the Association of Mortgage Intermediaries celebrates its fifth birthday, director-general Chris Cummings believes the battle-hardened trade body can help its members survive the credit crunch. Christine Toner and Robert Thickett report ...

The industry has lost the power to heal itself.
May 5, 2008... Chris Cummings is director-general of AMI The current travails of the UK mortgage market have their roots deep in the US sub-prime debacle. But the scenario being played out today has come about through a confluence of events which...

Market turbulence highlights the need for a strong voice for brokers.
May 5, 2008... It's been eight months since Richard Farr became director of AMI. We ask him how he's found his time in charge. When Chris Cummings helped set up AMI in 2003, statutory regulation was about to descend on the sector and brokers were...

MPC: Shadow MPC.
May 5, 2008... The desire to stimulate the housing market leads to a split decision by the Mortgage Strategy GE Money Home Lending Shadow Monetary Policy Committee, with the majority calling for a 0.25% cut in the base rate this month Melanie Bien,...

COMMENT: US still in denial over recession.
May 5, 2008... Kevin Paterson takes a weekly peek at the latest developments in the market and brings you what's hot and what's not in the world of mortgages The US is in denial. There are signs everywhere that the country is in recession yet its...

COMMENT: New-build is becoming old news.
May 5, 2008... If more evidence were needed of the slowdown in the housing market, Persimmon Homes has halted building on new sites until there is evidence of a recovery. It says house sales are 18% lower than at this time last year and has called on...

COMMENT: Opportunities down on the farm.
May 5, 2008... While the rest of the housing market seems to be in freefall with high interest rates, a serious shortage of supply and prices falling by the month, there's still money in farmland. Arable land is experiencing a renaissance, with...

DEAR DELIA: Clients' mortgage offer withdrawn.
May 5, 2008... My clients' mortgage offer was withdrawn the day before they were due to exchange. They are in a long chain so they will have to complete as soon as possible or the chain will fall apart and they will risk losing their buyer and the house...

COMMENT: Downvaluation trend is spreading.
May 5, 2008... I'm seeing a growing number of downvaluations and wonder if surveyors have been given blanket instructions by lenders to suppress house prices, says Sue Read A while ago I mentioned that there seem to be more downvaluations in the...

COMMENT: Old money still rules London's roost.
May 5, 2008... A handful of ancient aristocratic families still own vast swathes of central London, which is interesting in a property-owning democracy, says Simon White There are several estates in central London that fascinate me. It's still the case...

COMMENT: Networks' strength is in their numbers.
May 5, 2008... Brokers can benefit from appointed representative status in today's difficult market but they must investigate networks' financial track records before proceeding, says Sally Laker The phrase strength in numbers has never been more apt....

COMMENT: Lenders must think outside B2L box.
May 5, 2008... Lenders are becoming more averse to risk but a look at landlords' track records should show whether they are safe bets for competitive buy-to- let deals, says Mark Harris Lenders are tightening the screws on landlords as the credit crunch...

CurriculumVitae: Paul Fisher.
May 5, 2008... Name: Paul Fisher Age: 43 Company: Premier Network Group Job Title: Head of group operations Where do you live? Hinckley, Leicestershire Describe your current job: I manage PNG's packaging and compliance...

COMMENT: War is declared on dual pricing.
May 12, 2008... It's amazing what a difference a year makes. Twelve months ago, the mortgage market was awash with money and lenders were fighting hand over fist to secure your business. There were 5.54% self-cert deals from Advantage; Platform was...

Dual pricing hostilities loom.
May 12, 2008... Networks have vowed to unleash hell if lenders do not put a stop to dual pricing. Bosses at some of the biggest mortgage networks have told Mortgage Strategy they may encourage brokers to use ancillary products as weapons if lenders...

Lenders unveil deposit account deals.
May 12, 2008... edeus has joined forces with Newcastle to provide brokers with an extra income stream in the form of two Newcastle deposit account products. A proc fee of up to 2.75% of the deposit is available, which provides as much commission on a...

Brokers call on lenders to define portability.
May 12, 2008... Brokers are urging lenders to adopt a standard definition of portability. This follows fears that loan book and asset sales have created a grey area in which borrowers could find they can't port existing loans to new homes. Terry...

Repossession orders in line with CML forecast.
May 12, 2008... The Council of Mortgage Lenders says figures from the Ministry of Justice that reveal a 17% rise in mortgage possession orders are broadly in line with its expectations. MoJ figures published last week show 27,530 mortgage possession...

IN BRIEF: Mike Mitchell retires from C&G.(Brief article)
May 12, 2008... Mike Mitchell, mortgage customer services director at Cheltenham & Gloucester, took early retirement last week. After 25 years in the Lloyds TSB Group, Mitchell has decided to retire to pursue other interests. Mitchell joined the Lloyds TSB...

IN BRIEF: First-day rule for HIPs is extended.(Brief article)
May 12, 2008... The government has extended the first-day marketing rule on Home Information Packs until the end of the year. Robin Marcus, director at Easier2Move, says: "We are delighted that the government is working to ensure consumers benefit from HIPs...

IN BRIEF: BoS to cut corporate jobs.(Brief article)
May 12, 2008... Bank of Scotland's corporate banking division is to cut some 90 posts in the UK. A spokesman for BoS says: "The corporate division constantly reviews its operations to ensure it has the right level of staff to meet the needs of the...

IN BRIEF: L&G appoints insurance boss.(Brief article)
May 12, 2008... Legal & General has appointed Peter Graham as managing director of its general insurance business. He will report to John Pollock, group executive director of protection and annuities at L&G. He has more than 15 years of executive management...