Mortgage Strategy articles from October 2007

Mortgage Strategy archives from October 2007

COMMENT: BoE boss must act or leave the stage.
October 1, 2007... It's gone from crisis to farce. If you've not been paying attention, here's a little recap which will help explain why Mortgage Strategy believes Bank of England governor Mervyn King's position is fast becoming untenable. It's August 8...

UK lender in huge margin call.
October 1, 2007... Mortgage Strategy understands that two US investment banks have made their biggest ever margin calls on the same UK lender, while another has withdrawn its warehouse line to it entirely. Together the banks are believed to have funded at...

Keep your diary free for next year's exciting Mortgage Summit in Cyprus.
October 1, 2007... Mortgage Strategy's fourth Mortgage Summit will take place next May in the lavish setting of the Aphrodite Hills Hotel in Cyprus. Building on the success of this year's Dubai Mortgage Summit, next year's event will be held between May 20...

Mortgage sector may lose #100bn.
October 1, 2007... The credit crunch could wipe as much as #100bn off the mortgage market, pundits are warning. Firms are reporting reductions in business volumes as rate and criteria changes price borrowers out of the market. Last week, DB Mortgages...

IN BRIEF: Victoria rescue rumours.(Brief article)
October 1, 2007... UBS and Credit Suisse have been highlighted as possible rescuers for embattled lender Victoria Mortgages. Victoria went into administration on September 10 and was unable to complete many offers. UBS is refusing to comment on the rumour but...

IN BRIEF: NR may have taken more cash.(Brief article)
October 1, 2007... New Star economist Simon Ward claims Northern Rock has taken an additional #5bn from the Bank of England, bringing its total borrowing to #8bn in the past few weeks. Ward bases his assertion on an influx of liquidity listed as "other assets" in...

IN BRIEF: Close suspends specialist firm.(Brief article)
October 1, 2007... Close Brothers has suspended its specialist lender Close Mortgages in light of "the uneconomic returns available in this sector". Despite the closure, Mortgage Intelligence, which is one of Close's key distributors and shares the same...

IN BRIEF: Rate rise needed to help economy.(Brief article)
October 1, 2007... The Organisation for Economic Cooperation Development has warned that the UK may have to hike interest rates to bolster the economy. The group, which is representative of 33 advanced industrial countries, suggests the credit crunch could...

IN BRIEF: House price growth cooling.(Brief article)
October 1, 2007... House prices have remained at the same level for two months but the rate of growth has slipped to 5% from the April high of 6.8%, says Hometrack. Richard Donnell, director of research at Hometrack, says: "Turmoil in the financial markets has...

IN BRIEF: Halifax provides Positive Solution.(Brief article)
October 1, 2007... Halifax General Insurance is to provide its general insurance products to Positive Solutions members. The deal means Positive Solutions' network of 1,674 advisers will be able to provide Halifax's insurance products. Copyright: Centaur...

Deal direct with lenders, says Malone.
October 1, 2007... John Malone, managing director of Premier Mortgage Service, is urging brokers to cut out packagers and deal direct with lenders during these difficult times. In the past week alone there have been at least six lenders making drastic...

Buyer sought for Money Partners.
October 1, 2007... Speculation is rife that Investec has lost its appetite for the sub- prime market after Money Partners last week confirmed it is potentially seeking a buyer. The news comes just weeks after Kensington Mortgages revealed plans to focus on...

Atkinson tickled pink by best journalist accolade.
October 1, 2007... Mortgage Strategy's ace news editor Rebecca Atkinson was crowned Best Mortgage Industry Journalist for 2007 at last week's Pink Service Awards. Atkinson was stunned to hear she'd won and picked up a bouquet of flowers and champagne from...

BoE silent on auction rate.
October 1, 2007... The Bank of England is remaining tight-lipped about whether it will cut the rate of its next auction of funds on October 2. No bidders came forward for the BoE's first auction of #10bn, which was offered at 6.75% last week. But pundits...

Stock Picker.
October 1, 2007... Northern Rock shares stabilised after their recent dramatic decline. Following a period of intense speculation, US private equity firm JC Flowers & Co has emerged as the most credible buyer of the lender. But there is no guarantee of a...

IN BRIEF: Preferred reveals criteria changes.(Brief article)
October 1, 2007... Preferred has unveiled criteria changes including making self-cert products only available to the self-employed. Other changes include near-prime and near-prime extra deals being capped at 85% LTV. Copyright: Centaur Communications Ltd. and...

CML accused of not sticking up for brokers.
October 1, 2007... The Council of Mortgage Lenders has been accused of failing to stick up for brokers following the accusations of sub-prime mis-selling that have blighted the industry. Last week BBC Radio 4 broadcast a programme attacking mortgage...

Claims firms eye mortgage mis-selling.
October 1, 2007... Goldsmith Williams partner Eddie Goldsmith warns that claims firms are already looking to capitalise on the credit crunch and help out-of- pocket borrowers sue their lenders. In the latest episode of Mortgage Strategy TV, Goldsmith says...

IN BRIEF: Advantage unveils RAMP exclusive.(Brief article)
October 1, 2007... Advantage has launched the first exclusive deal in its ADV sub-prime range with the Regulatory Association of Mortgage Packagers. RAMP members can now access products from a range that offers a selection of two-year fixed rates starting from...

IN BRIEF: Demand rising for commercial deals.(Brief article)
October 1, 2007... Two-thirds of brokers say demand for commercial mortgages has risen during the past six months, according to Commercial First. Its research also shows that 73% of brokers think demand will continue to rise in the next six months. ...

IN BRIEF: Standard Life wins arts award.(Brief article)
October 1, 2007... Standard Life Assurance has won the arts, business and sustainability category in the Arts and Business Awards for its partnership with Children's Classic Concerts, in which children get to meet musicians. Copyright: Centaur...

Lexicon buys Barton Gold to bolster growth strategy.
October 1, 2007... Lexicon Group took the first step towards its goal of achieving #3bn worth of mortgage sales per year with the purchase of London-based mortgage club Barton Gold last week. The club has a loyal membership of some 60 directly authorised...

Axing tax relief could stall B2L.
October 1, 2007... The Association of Residential Letting Agents is warning that more than 40% of landlords would be reluctant to invest further in buy-to-let if tax relief was scrapped. In July, the Chartered Institute of Housing spearheaded a campaign to...

Brokers urged to diversify.
October 1, 2007... Rooftop Mortgages has urged sub-prime brokers to diversify in light of the current market turmoil. Speaking at the BDS Mortgage Group round table event at Thorpe Park last week, Alison Beech, director of business development at Rooftop,...

Options wins BDS packager award.
October 1, 2007... Amir Kharkowa and Simon Martindale from Options Independent Mortgage Advisers were presented with BDS Mortgage Group's satellite packager 'Straight to offer' award last week. They were presented with their trophy by Julian Clements, BDM...

Pink takes action over distasteful advert.
October 1, 2007... Pink Home Loans says it has taken appropriate action after a distasteful advertisement was placed in a magazine by one of its appointed representatives. The ad, which depicted a bikini-clad woman with the slogan 'Need to keep abreast of...

IN BRIEF: Affirmative picks South-East BDM.(Brief article)
October 1, 2007... Affirmative has appointed Anish Nathwani as BDM for the South and South- East. Previously at GE Money Home Lending, Nathwani brings with him significant experience, having built relationships with more than 80 brokers and packagers. ...

IN BRIEF: Platform cuts rates by 0.5%.(Brief article)
October 1, 2007... Platform is reducing rates by up to 0.50% across its prime, self-cert, buy-to-let and self-cert buy-to-let products with immediate effect. The range includes two or three trackers and fixed rates from 75% LTV and the House Plus product from...

IN BRIEF: Credit Suisse to axe 150 jobs.(Brief article)
October 1, 2007... Credit Suisse Group is to cut 150 jobs in the US and UK as a result of the recent market turbulence. The group says the cuts will be in mortgage-backed securities departments. Copyright: Centaur Communications Ltd. and licensors

IN BRIEF: Insurance AVM from UKValuation.(Brief article)
October 1, 2007... UKValuation has launched an automated valuation model insurance solution as part of its plan for an integrated approach to risk management for lenders. Copyright: Centaur Communications Ltd. and licensors

IN BRIEF: Landlords cut their gearing.(Brief article)
October 1, 2007... Paragon Mortgages says landlords are reducing their portfolio gearing - the proportion of borrowing to equity - to protect themselves against possible interest rate rises. It says the average landlord's portfolio gearing has fallen from 48%...

IN BRIEF: MTE extends loyalty promotion.(Brief article)
October 1, 2007... The Mortgage Trading Exchange is extending its summer loyalty promotion until October 14. The promotion allows MTE customers to qualify for a variety of rewards depending on the number of transactions they complete via the platform. ...

PPI selling still not up to scratch, says FSA.
October 1, 2007... Firms are continuing to flout Treating Customers Fairly guidelines when it comes to payment protection insurance sales, the Financial Services Authority has revealed. The regulator's review of sales standards for PPI has found that many...

Online tool to streamline protection advice launched.
October 1, 2007... Synaptic has launched an online tool designed to allow brokers to research and apply for life and health protection products. Synaptic Protection Research is designed to streamline the health and life insurance process by integrating with...

Club signs up to Promise.
October 1, 2007... Mortgage Promotions has signed up to Promise Solutions' secured loan sourcing and underwriting system. The mortgage club will make online sourcing system PromiseQuote available to all its network members. Nick Baxter, director of...

Making waves with charity cross-Channel swim.
October 1, 2007... Staff at the Lancashire Mortgage Corporation were celebrating last week after project manager Gareth Wilson successfully completed a cross- Channel swim between Dover and Cap Gris Nez in France. Wilson covered the 20 miles in 15 hours and...

House prices defy gloomy forecasts.
October 1, 2007... House prices increased by 0.7% in September, defying downbeat expectations, Nationwide's house price index has revealed. Despite the credit crunch, house prices continued to grow, albeit at their lowest level since July 2006. The 12-month...

IN BRIEF: Investors turn their attention overseas.(Brief article)
October 1, 2007... The Northern Rock crisis has prompted property investors to look overseas. A poll at the ExCel Property Investment Exhibition in London revealed that almost 40% of potential investors have increased their interest in overseas property. ...

IN BRIEF: Post Office in mortgage trial.(Brief article)
October 1, 2007... The Post Office will be trialling three mortgage products in the north of England. The deals will be led by a three-year fixed rate product with an initial rate of 6.09%. Copyright: Centaur Communications Ltd. and licensors

IN BRIEF: TML chooses cover provider.(Brief article)
October 1, 2007... Direct Group will supply all insurance products and administration services to South Coast-based The Mortgage Lender. The relationship will initially mean the provision of creditor and term life insurances. Copyright: Centaur Communications...

Pru rewards healthy lifestyle.
October 1, 2007... Prudential and South Africa-based insurer Discovery have jointly launched PruProtect, a protection product that uses a points system to encourage people to take care of their health. PruProtect consists of a suite of products including life...

Online B2L profit calculator unveiled.
October 1, 2007... A website is offering buyers the opportunity to calculate the profitability of buy-to-let investments online. Dothesums.co.uk charges #49.50 for a report that analyses a buy-to-let deal along with possible interest rate variations, then...

Morgan Stanley denies US racial bias claim.
October 1, 2007... Morgan Stanley has been accused of racial discrimination through its US lender Saxon Mortgages. The US National Community Reinvestment Coalition alleges the lender's minimum loan limits prevent ethnic minorities from getting funding for...

IN BRIEF: HML now has #50bn in assets.(Brief article)
October 1, 2007... Homeloan Management Limited says it now has #50bn of assets under administration. Steve Haggerty, chairman of HML, says: "Our assets have grown from around #5bn in 2000 to #20bn in 2003 and now to #50bn." Copyright: Centaur Communications...

IN BRIEF: RBSIP launches two-year fix.(Brief article)
October 1, 2007... Royal Bank of Scotland Intermediary Partners has unveiled a two-year fixed rate deal under its RBS brand. The deal features an initial rate of 6.49% with no arrangement fee. Copyright: Centaur Communications Ltd. and licensors

Call to swap APRs with DARs.
October 1, 2007... Research commissioned by the Council of Mortgage Lenders has suggested a new method of calculating the cost of a mortgage to complement APRs. APRs calculate the average cost of loans to borrowers under the assumption that the loan will be...

Income solution to rental shortfalls.
October 1, 2007... Packagers have called on lenders to make up any shortfalls in rental assessment using borrowers' income. A packager poll by GMAC-RFC on its website asks packagers what they believe is the best way to help achieve buy-to-let rental incomes...

Compliance associate to boost RAMP's services.
October 1, 2007... The Regulatory Alliance of Mortgage Packagers has appointed Andy Setchell as compliance associate. Setchell, who joins from Resolution, where he held a variety of senior compliance and sales roles, will be based in the north of England....

IN BRIEF: Fixed rates from Kensington.(Brief article)
October 1, 2007... Kensington Mortgages is launching a range of two and three-year fixed rate specialist prime products. The range includes self-cert fixed rates from 5.89% at 75% LTV and available up to 90% LTV. Buy-to-let fixed rates start from 5.88% at 75%...

IN BRIEF: Abacus offers free valuations.(Brief article)
October 1, 2007... Abacus Permanent is offering free valuations on its range of Salt- funded residential products. Rates start at 6.19% fixed for two years and are available at up to 90% LTV. There is no higher lending charge. Copyright: Centaur...

IN BRIEF: Commercial appointment.(Brief article)
October 1, 2007... Commercial First has appointed Paula Purdy to the newly-created role of national network manager. She will develop relationships with mortgage and IFA networks. For the past three years, Purdy has developed the North-West sales region for...

IN BRIEF: Hometrack buys into Aussie firm.(Brief article)
October 1, 2007... Hometrack has bought a 50% share in Australian residential research company Residex to form Hometrack Australia. Residex was responsible for developing Australia's first automated valuation model. Copyright: Centaur Communications Ltd. and...

Lessons in financial history.
October 1, 2007... Medieval monarchs were the original sub-prime borrowers and could hold the key to a better understanding of the modern lending industry, researchers have claimed. Professor Chris Brooks and Dr Adrian Bell, financial experts at the ICMA...

Leeds staff go the extra miles for Help the Aged.
October 1, 2007... A team of nine Leeds employees took part in the BUPA Great North Run at the weekend to raise money for charity Help the Aged. The world's best-attended half marathon, the Great North Run starts in Newcastle and finishes in South Shields....

Mosaic rewards loyal members.
October 1, 2007... Mosaic Mortgage Club is due to distribute its first profit share fund this week. Payments will be made to members and firms who have supported the club with business completed through its panel of lenders. This initial payout does...

IN BRIEF: HSHL added to Solent panel.(Brief article)
October 1, 2007... High Street Home Loans has been added to the lender panel of Solent Mortgage Services. Ian Balfour, sales and marketing director of SMS, says: "The current crisis has highlighted the need for brokers to look for accurate information on the...

IN BRIEF: Consumers save at record levels.(Brief article)
October 1, 2007... Unbiased.co.uk says consumers are taking advantage of higher interest rates by saving at record levels. It says savings hit #47bn in Q2 2007. It also found for every pound consumers saved during Q2, they only borrowed 8p - a sizeable drop...

IN BRIEF: Paradigm unveils bridging panel.(Brief article)
October 1, 2007... Paradigm Mortgage Services has unveiled its bridging lender panel with Cheval Bridging Finance the first lender available to members. Bob Hunt, chief executive of Paradigm, says: "We are delighted to announce the start of our relationship...

Should heads roll over the NR crisis and will it survive as a brand?
October 1, 2007... As the spotlight refused to move from Northern Rock last week, accusations of blame flew across the market. Bank of England governor Mervyn King was hauled in front of a Treasury Select Committee to explain his actions, but the finger is also...

Most over-60s unaware of value of their homes.
October 1, 2007... Home owners aged over 60 have more than #841bn tied up in bricks and mortar, yet just one in 10 knows how much their home is worth, Norwich Union has revealed. Its research among the over-60s found that on average they each had #82,446...

ANALYSIS: Market watch - 01.10.07.
October 1, 2007... Swaps continued to fall last week, which is going to be great news for prime fixed rates. * One-year money is down 0.14% at 6.08% * Two-year money is down 0.10% at 5.79% * Three-year money is down 0.07% at 5.71% * Five-year...

How will financial turmoil affect housing market in longer term?
October 1, 2007... It will take up to two years for the market to stabilise after which house prices should start to rise again, according to our experts David Wylie is group chairman of c2-financial Problems were feeding into the housing market before...

ANALYSIS: A truer picture of long-term value.
October 1, 2007... The APR has been around as a comparative measure of loan and mortgage rates since before the Financial Services Authority took over the regulation of the mortgage sector. In all the time it has been plastered across mortgage literature, the...

ANALYSIS: Offsets prove their worth to borrowers.
October 1, 2007... Many consumers find the mortgage market a maze when it comes to selecting a deal that suits their needs. There are a number of key things that need to be considered when making the final choice - should it be interest-only or repayment,...

ANALYSIS: Insurance that rewards healthy living.
October 1, 2007... I wanted to write about something other than the beleaguered sub-prime market this week, but in view of how much it is struggling it's impossible to avoid the topic. For example, Investec has issued a profit warning for Kensington Group,...

ANALYSIS: GI could be a safe haven for brokers.
October 1, 2007... Given the current turmoil in the market, brokers must be concerned about whether or not their turnover levels can be sustained. They are right to be worried. The implications of the credit crunch will rumble on for some time and only when...

ANALYSIS: Strange timing for a strange product.
October 1, 2007... Just when you thought lenders might be heeding the warnings of recent weeks and clamping down on their criteria, along comes Abbey with a crazy deal. Abbey's new product, which in some situations will lend up to 125% LTV, is strange on...

ANALYSIS: Loyalty deals make business sense.
October 1, 2007... Those clever people at Nationwide have decided to reward loyal borrowers with an exclusive deal. So if you are a switcher - an existing Nationwide mortgage holder moving to another Nationwide mortgage - you can take out a five-year fixed rate...

ANALYSIS: Abbey unwise to seize the opportunity.
October 1, 2007... Credit crunch drama? More like complete panic. With thousands of savers queuing around the block to haul their money out of Northern Rock and paralysis in the money markets, it came as a bit of a shock that Abbey had launched a 125% LTV...

ANALYSIS: Cowabunga! Abbey may get away with 125% deal.
October 1, 2007... To paraphrase Rudyard Kipling's famous opening line of his poem If, the successful ones in life are those who keep their head while others are losing theirs. It makes sense to me. So what is the future for someone who manages to,...

ANALYSIS: Only Mourinho can save financial services now.
October 1, 2007... When considering the crisis at Northern Rock recently, I had a fancy that the solution might lie with another English institution that has been hitting the headlines of late. Could a combination of football and finance be the key? I've...

ANALYSIS: Packagers can help in these turbulent times.
October 1, 2007... There has never been a better time to use the services of packagers. The fallout from the US crisis, including the Northern Rock affair and problems in the sub-prime market, are having a serious effect on mortgage businesses and...

ANALYSIS: Second charges will be LTV-driven.
October 1, 2007... Many individuals who went on holiday a few weeks ago are returning to find that they can't get the loan they applied for and no longer qualify for a loan at all. The only solution they can be offered is an individual voluntary arrangement....

ANALYSIS: It's time for limited liability on advice.
October 1, 2007... Until six months ago, I was guilty of paying too little attention to the details of regulation. I sat with clients every day, offering advice to first-time buyers and remortgagers via all sorts of bizarre scenarios in between. One I remember...

ANALYSIS: More vigilance needed to guard against fraud.
October 1, 2007... Fraud has never been higher on the agenda than it is now. Just open any newspaper and the chances are there will be a story about the victims of fraud. With the growth of the internet and the well-publicised problems regarding credit...

ANALYSIS: Commercial market faces slowdown.
October 1, 2007... The commercial property investment market has seen excellent returns on rental yields and resales in recent years, making it one of the best performing asset classes in the UK. But recent rises in the Bank of England base rate and LIBOR...

ANALYSIS: Time to take stock of your business.
October 1, 2007... A positive outcome of turbulent times when businesses are concerned about volume and profitability is the re-engineering that takes place to examine efficiency. For a business, questions such as whether it has been aligned with the right...

ANALYSIS: Make more from each mortgage sale.
October 1, 2007... In the past couple of weeks, the financial headlines have been dominated by stories of gloom and doom. I'm not only talking about the credit crisis and Northern Rock, but also reports that house prices are heading south and the mortgage...

ANALYSIS: Sell-and-rent-backs overstep the mark.
October 1, 2007... This week I return again to sell-and-rent-back schemes. Momentum is now building across the industry to have a level playing field. In the Daily Express recently, the paper's deputy personal finance editor Holly Thomas reported on the...

ANALYSIS: Consumers' loans should be insured.
October 1, 2007... At a recent Association of British Insurers Protection breakfast meeting, Teresa Perchard, public policy director at Citizens Advice Bureau, warned that Brits are sleepwalking into a mountain of debt. CAB figures show that a record number...

LETTER: Secured loans are valid alternatives to remortgaging.(Letter to the editor)
October 1, 2007... From Robert Clayton Kevin Paterson is right when he says that secured loans should form a significant part of a professional broker's armoury (Mortgage Strategy Letters September 17). But surely the main reason that brokers should...

LETTER: Thanks Mortgage Strategy for balanced reporting in tough times.(Letter to the editor)
October 1, 2007... From Roger Morris I would like to commend your editorial stance in this dark time. At a time when the markets are in turmoil, lenders are going out of business and uncertainty hangs in the air, Mortgage Strategy has been a source of...

LETTER: Dodgy brokers risk exposure by FSA mystery shoppers.(Letter to the editor)
October 1, 2007... From Neal Smith So mortgage mis-selling was sensationally exposed on BBC radio's File on 4 last Tuesday, was it? Tell us something we didn't know. The vast majority of brokers know that if they advise a client not to take out a...

LETTER: Lenders' communications sometimes take the mickey.(Letter to the editor)
October 1, 2007... From Wayne Dewsbury At what point do communications from lenders to packagers cross over from being useful to taking the mickey? For example, here's a text I received from our BM Solutions BDM at 6.26pm on a recent Friday: "All...