Mortgage Strategy articles from October 2008

Mortgage Strategy archives from October 2008

Bad times mean brokers are needed more than ever.
October 6, 2008... It's safe to say that industry confidence hit rock-bottom last week. In the wake of the US Senate initially refusing to back President George Bush and Treasury secretary Henry Paulson's $700bn rescue plan, the market was left giddy and sick...

PRODUCTS: Fears for BM as HBOS cuts B2L LTVs to 75%.
October 6, 2008... HBOS battened down the hatches last week and slashed maximum LTVs to 75% across its specialist brands, sparking fears that BM Solutions is making a silent exit from the market. HBOS cut LTVs to 75% across its BM Solutions and Bank of...

BROKERS: Debt and mortgage advice firm to launch.
October 6, 2008... Neil Jenkins, former head of franchise operations at Mortgage Options, is launching a combined mortgage brokerage and debt management business. Jenkins is planning to roll out DCM Financial Solutions in November. It will focus on...

MORTGAGE CRISIS: Congress passes rescue package.
October 6, 2008... The US Congress passed a revised version of Treasury secretary Henry Paulson's $700bn financial rescue package as Mortgage Strategy went to press on Friday. The final vote settled at 263 yeas and 171 nays. Last Monday the House of...

MORTGAGE CRISIS: Government likely to honour B&B loan sales.
October 6, 2008... The government is likely to honour the loan sale arrangements Bradford & Bingley has agreed with Kensington and GMAC-RFC. Steve Khan, proprietor of The Mortgage Trading Consultancy, says: "The only way to break the terms of the contract...

MORTGAGE CRISIS: B&B deal could pose problems for ER sector.
October 6, 2008... Duncan Young, chief executive of Retirement Plus, is warning that the nationalisation of Bradford & Bingley will have a negative impact on the equity release market. Young says that the withdrawal of B&B from the sector will mean fewer...

Brokers reject #100 incentive.
October 6, 2008... A huge 67% of Mortgage Strategy readers say they would not give their business to a specialist broker for an extra #100 proc fee. The results suggest brokers are more comfortable placing business with larger tried and tested firms rather...

Buyout will see Moneyextra.com compete with comparison sites.
October 6, 2008... Moneyextra.com is to go head-to-head with Moneysupermarket.com after being bought by Help Group owner John Elder and a group of private investors from AWD Chase de Vere. Elder plans to make Money-extra.com one of the top three comparison...

BROKERS: AMI publishes guide to help brokers cope.
October 6, 2008... The Association of Mortgage Intermediaries has published a list of survival tips to help brokers weather the credit crunch. In a report last week AMI estimated that up to 40% of firms will generate less income in 2008/09 than 2007. The...

TECHNOLOGY: Free CRM system aimed at brokers.
October 6, 2008... Invent Software is launching an online back office processing system for brokers this week. The client relationship management and back office software I-map X will be offered free of charge. Invent says it will generate income via...

NETWORKS: Trustguard ARs find new homes.
October 6, 2008... No individual network picked up more than two of the 33 appointed representatives left high and dry when Trustguard went under in July. Trustguard's ARs had been told by the firm's administrators that they would not receive pipeline...

Industry raises over #100,000 for charity.
October 6, 2008... The superstars of the mortgage world banded together the weekend before last to run the Berlin Mara-thon to raise money for Macmillan Cancer Support. As profiled over the past three months in the pages of Mortgage Strategy, the team -...

BUY-TO-LET: Brokers bemoan lack of B2L deals.
October 6, 2008... Brokers are concerned that the withdrawal of Bradford & Bingley brand Mortgage Express from the buy-to-let market will further restrict the number of products available. The Council of Mortgage Lenders' table for the top 10 buy-to-let...

HIPS: Poor practice in Birmingham HIP searches.
October 6, 2008... Birmingham Trading Standards fears some Home Information Pack search companies are not carrying out proper searches in an attempt to boost profits. The suspicions were aroused after officers randomly selected six estate agents and asked...

PPI: FSA slammed for dithering over PPI sales.
October 6, 2008... The Financial Services Authority has been accused of dithering over its work on single premium payment protection insurance sales. As part of its thematic review of the PPI market, the FSA has been carrying out a series of mystery shopping...

REPOSSESSIONS: Hedge fund body rejects warning.
October 6, 2008... The Hedge Fund Association has rejected accusations that hedge funds are more likely to repossess struggling borrowers than traditional lenders. Earlier this month Steve Khan, former head of residential trading at Morgan Stanley and...

COMMERCIAL LOANS: Arrears code exemption sought.
October 6, 2008... The Association of Short Term Lenders is calling on the Civil Justice Council to make commercial mortgages exempt from its arrears protocol. The protocol is due to come into force next spring and the Council of Mortgage Lenders is...

PRODUCTS: Enterprise offers exclusives range.
October 6, 2008... Enterprise Group has launched a range of exclusives from Platform. The fixed rate products are available for both purchase and remortgages at a 0.5% discount from Platform's standard range. Maximum LTVs on the range are 80% for full...

IN BRIEF: Nationwide reports 12% house price fall.(Brief article)
October 6, 2008... Nationwide has reported a 12% year-on-year fall in house prices in September. This is the greatest drop recorded by its survey, which began in 1952. Copyright: Centaur Communications Ltd. and licensors

IN BRIEF: EC wants capital requirement changes.(Brief article)
October 6, 2008... The EC has proposed changes to capital requirements to reinforce the financial system's stability, reduce risk exposure and improve cross- border supervision. Copyright: Centaur Communications Ltd. and licensors

POLITICS: Pundits react to politicians' unity.
October 6, 2008... Industry pundits are split over the effectiveness of a non-partisan approach to the economic meltdown caused by the credit crunch. Conservative shadow chancellor George Osborne and Liberal Democrat shadow chancellor Vince Cable visited the...

MORTGAGE CRISIS: GEMHL and Lehmans make 850 redundant.
October 6, 2008... Another 850 mortgage industry jobs have been lost following the closure of GE Money Home Lending's Wolverhampton office and the restructure of Lehman Brothers Europe. One hundred jobs have gone due to the closure of a GEMHL mortgage...

IN BRIEF: Borrowers clueless about deals.(Brief article)
October 6, 2008... Research from Norwich Union has found that 72% of borrowers don't know what type of mortgage they have and 67% don't know what their monthly repayments are. Copyright: Centaur Communications Ltd. and licensors

IN BRIEF: Tesco considers move into mortgage market.(Brief article)
October 6, 2008... Tesco could enter the mortgage market. Andrew Higginson, finance director at Tesco, says: "More rational pricing would provide an opportunity to go in." Copyright: Centaur Communications Ltd. and licensors

ANALYSIS: Marketwatch - 06.10.08.
October 6, 2008... Last week was a dreadful one for the market and the financial turmoil led lenders to give brokers tough deadlines for product withdrawals Swaps plunged and are now back to the low levels they fell to a couple of weeks ago. Let's hope...

ANALYSIS: Paulson's bad medicine makes no sense.
October 6, 2008... Looking for an analogy to what I was watching on TV - I'm referring to the events in Washington and the debate over US Treasury secretary Henry Paulson's $700bn plan to rescue the US banking industry - the best I could come up with was a...

ANALYSIS: Taking B&B into public ownership has its upsides.
October 6, 2008... I would like to write something positive and forward-looking but with seismic financial events happening almost constantly it's a difficult task. Nevertheless I'll have a go. Last Monday morning I headed to London for various meetings and...

ANALYSIS: Market forces see the rebirth of nationalisation.
October 6, 2008... I n the late 1970s when I was working in the building society sector, I remember having many conversations with one banker about his fear that there was a risk of banks being nationalised. In the old days nationalisation was the...

ANALYSIS: Consumers and firms to blame for credit gluttony.
October 6, 2008... The news that GMAC-RFC is to cease loan origination is a body blow to the specialist lending industry. GMAC-RFC was the leading specialist lender in the UK for a number of years, having assumed the mantle from Kensington. Its origination...

ANALYSIS: True women's lib means taking out protection.
October 6, 2008... We have come a long way since the 1970s, as any fan of BBC police drama Life on Mars will testify. I for one have shorter hair and thinner ties. Far more women work today than was the case 30 years ago - nearly three- quarters compared...

ANALYSIS: Building a fence around the base of the volcano.
October 6, 2008... Well that's it then. With Bradford & Bingley sliding towards oblivion we are probably seeing the final the former building societies that abandoned mutuality for the lure of the profits unleashed by greater wholesale funding. Each...

LETTER: C&G's approach to NR clients smacks of a parallel universe.(Letter to the editor)
October 6, 2008... Am I the only one who thinks that the mortgage market has entered our reality from a parallel universe invented by Douglas Adams in The hitchhiker's guide to the galaxy? Having completed six impossible things this morning I turned to a...

LETTER: Loss of consumer faith in FSA is the right response.(Letter to the editor)
October 6, 2008... Regarding your story about the YouGov survey showing that customers are losing faith in the Financial Services Authority (Mortgage Strategy Online September 22) - why should they trust the FSA? Indeed, which financial organisations are...

LETTER: Central banks can do nothing about credit crunch.(Letter to the editor)
October 6, 2008... We are in a market with far too many intermediaries between customers and capital. I can't imagine there will be too much of an impact on consumers because we lose HBOS. The problem with the market at the moment from consumers'...

LETTER: Perhaps it is time to abandon commission.(Letter to the editor)
October 6, 2008... Just before 9am on Saturday morning's BBC Breakfast news, Money box presenter Paul Lewis did a good job of explaining how the opaque pricing and rating of collateralised debt obligations were instrumental in the credit crunch and the ongoing...

LETTER: Berlin Marathon runners raised #100,000 for charity.(Letter to the editor)
October 6, 2008... The mortgage industry had 35 entrants in the recent Berlin Marathon and on their behalf I'd like to thank Mortgage Strategy for profiling their efforts so well. The runners helped raise over #100,000 for Macmillan Cancer Support and...

COVER: Party's over.
October 6, 2008... The credit crunch has reached a new level. B&B has been part- nationalised, MEX and GMAC-RFC have left the specialist market and the US bailout plan hangs in the balance Now it gets nasty. The US Congress rejected plans for a $700bn...

B&B goes under but the question is how did it hang on for so long.
October 6, 2008... Last Monday Bradford & Bingley's shares were suspended, its deposits and branches sold and its assets nationalised, but the miracle is that it managed to survive for so long. When Chris Rodrigues took over from Geoff Lister as B&B chief...

Industry pundits offer their views on the B&B and GMAC-RFC news.
October 6, 2008... Bob Sturges director of communications Money Partners With B&B, the government has avoided a repeat of the protracted events leading to the nationalisation of Northern Rock. It has also prevented a damaging run on B&B's deposits. But...

SHADOW MPC: OCTOBER 2008.
October 6, 2008... This month's decision: Hold * There is dissension in the ranks of the Mortgage Strategy GE Money Home Lending Shadow Monetary Policy Committee this month, with six members calling for a base rate hold and three advocating cuts as a...

FEATURE: Network news.
October 6, 2008... In the latest quarterly review Sesame has retained top spot in the IFA sphere and Network Data is number one in mortgages as the sector comes to term with Trustguard's demise The table shows the total number of appointed representative...

COMMENT: Old school firms consigned to history's dustbin.
October 6, 2008... I spent an enjoyable evening recently at the Pink Home Loans Service Awards. Given the events of the preceding few days, it was interesting to be invited as a guest of Halifax. I thank it for a great night. Conversation at the table and...

COMMENT: Morris' design and Bazalgette's pipe dreams.
October 6, 2008... Although Lloyds TSB's takeover of HBOS was necessary it's a shame so many venerable brands are disappearing It is often said that London is a collection of villages and that's true. In much the same way it's also a collection of styles...

COMMENT: Ethical business is in the eye of the beholder.
October 6, 2008... There are many ways to make finance more ethical but echoing local concerns can pay dividends I was amused to read about the new policy of one PR agency to display a 'care for the environment' logo on the bottom of every document...

COMMENT: Switch to fees not as scary as some brokers think.
October 6, 2008... Brokers' fears of charging clients fees may be unfounded and the transition will help boost the sector's standing An increasing number of brokers are realising that they may have to charge clients fees in the future rather than relying on...

Curriculumvitae: Bob Sturges.
October 6, 2008... Bob Sturges, director, Money Partners Describe your current job I'm responsible for internal and external communications for the company. This involves keeping our employees informed of major developments affecting our business and...

The week in numbers: 06.10.08.
October 6, 2008... The average first-time buyer needs a deposit of #19,100 to enable them to buy a property, according to The Co-operative Bank. Its poll of consumers found that 46% are lowering their property expectations, 36% are changing their shopping habits...

COMMENT: The end of the beginning.
October 13, 2008... What a week. A #500bn spoonful of sugar helps the medicine go down and Mortgage Strategy can only hope that a weekend of reflection has helped ease the credit crisis engulfing the global markets. What started as a small-town problem in...

MORTGAGE CRISIS: I have backing to buy back edeus, says Bolton.
October 13, 2008... Former edeus CEO Michael Bolton says he can buy back the business from administrator KPMG with the backing of an unnamed "Australian entrepreneur". He has grandiose plans to launch an asset-buying business spanning three continents with a...

MORTGAGE CRISIS: Banks' share prices dive despite bailout.
October 13, 2008... Banks saw their share prices crumble last week despite the government's #500bn rescue package. By close of play on Friday the biggest loser was the Royal Bank of Scotland, which saw its share price fall by a whopping 25% to just 71.7p per...

MORTGAGE CRISIS: Former Portman boss takes reins at West Brom.
October 13, 2008... Robert Sharpe, former chief executive of Portman, has been appointed chief executive officer of West Bromwich. Sharpe succeeds Stephen Karle, who has been CEO of the mutual since 2006. Karle joined the West Brom group in 1995 and...

BUY-TO-LET: TBMC sees best buy-to-let month since 2007.
October 13, 2008... The Business Mortgage Company has had its best month for buy-to-let applications in almost a year. The buy-to-let broker says applications in September were double the levels the firm recorded three months ago. TBMC says the figures...

LENDERS: BM Solutions still committed to packagers.
October 13, 2008... Nigel Payne, managing director of BM Solutions, has reaffirmed his commitment to packagers and says the lender is on track to launch an exclusive range of products on October 25. Speaking at Mortgage Intelligence's annual conference last...

Readers doubt impact of US plan.
October 13, 2008... The majority of Mortgage Strategy Online readers predict that the US bailout agreed this month will not spur a mortgage renaissance. It appears the markets think so too as they continued to falter last week, with the FTSE 100 experiencing its...

NETWORKS: MI looking to swallow rival networks as profits hit #1.5m.
October 13, 2008... Mortgage Intelligence is on the acquisition trail in the wake of announcing an annual profit of #1.5m. Speaking to Mortgage Strategy at the network's annual conference in Newport, South Wales, Sally Laker, managing director of MI, says:...

BUY-TO-LET: Six BoS credit checks ruin client's chances.
October 13, 2008... A broker is outraged that a wealthy buy-to-let client has missed out on a good rate with Bank of Scotland because it credit checked them six times. Phil Duff, partner at Cambridge-based firm Russell Residential Financial, applied for a...

COMMERCIAL: NACFB warns of upfront fees.
October 13, 2008... The National Association of Commercial Finance Brokers has sounded another warning to members about lenders charging upfront fees. The NACFB has seen a number of members becoming concerned about unscrupulous lenders that are charging...

MORTGAGE CRISIS: HBOS reshuffles its sales staff.
October 13, 2008... HBOS is working to redeploy its sales team but cannot rule out possible redundancies. The lender revealed a number of changes to its mortgage sales team last week as it tried to reshuffle staff. It says it is still working through...

MORTGAGE CRISIS: Kent faces #50m losses.
October 13, 2008... Mike Lazenby, chief executive of Kent Reliance, says Kent County Council should have invested #50m in its local society rather than failed Icelandic bank Landsbanki. The council is understood to be the local authority worst hit by the...

TCF: Nationwide process under fire.
October 13, 2008... A broker is concerned that Nationwide's online application process may be in breach of Treating Customers Fairly principles. He says the application system does not give applicants the chance to opt out of its valuation process before...

PPI: FSA hits A&L with #7m PPI fine.
October 13, 2008... Controversy hit the payment protection insurance market once again last week after Alliance & Leicester was slapped with a #7m fine from the Financial Services Authority for serious failings in its telephone sales. The regulator says...

EQUITY RELEASE: ER product for diabetic clients.
October 13, 2008... Diabetes UK and insurer Heath Lambert Group have teamed up with Key Retirement Solutions to create equity release products to cater for customers with diabetes. One of Diabetes UK's priorities is offering members access to financial...

INTEREST RATES: NR urged to slash SVR after base rate cut.
October 13, 2008... Brokers are calling on Northern Rock to obey chancellor Alistair Darling and pass rate cuts on to borrowers. The government - which owns NR - has been pushing lenders to pass on the 0.25% base rate cut made in April to customers for over...

REGULATION: Tories would strip FSA powers and give them to BoE.
October 13, 2008... Conservative shadow foreign secretary William Hague has said that regulatory powers will be snatched away from the Financial Services Authority and put in the hands of the Bank of England if the Tories gain power. Speaking at Mortgage...

EQUITY RELEASE: IFA casts doubt on ER's worth.
October 13, 2008... An IFA has sparked the equity release debate once again by claiming that despite industry assurances such deals remain products of last resort. Last month a Which? guide claimed borrowers using equity release may end up worse off. And...

POLITICS: Save FTBs from B2L vultures, Beckett told.
October 13, 2008... New housing minister Margaret Beckett has been urged to protect first- time buyers from vulture property investors. Beckett, veteran Labour politician and foreign secretary to former Prime Minister Tony Blair until June 2007, has returned...

PROTECTION: E2M unveils protection deal for clients and brokers.
October 13, 2008... Easier2Move is guaranteeing that brokers will receive their proc fees whether deals complete or not with the launch of a reimbursement plan. Easier2Protect guarantees brokers a proc fee of #100 plus vat as long as deals are legitimate...

MORTGAGE CRISIS: IMF puts price tag on US credit crunch recovery.
October 13, 2008... The International Monetary Fund is predicting that it will take time and a lot of capital - some #337bn - to sort out the credit crunch in the US. The global body, which monitors, assists and provides loans to economies around the world,...

OFFSET: Providers ponder guarantee effect.
October 13, 2008... Offset providers are unsure what effect the #50,000 deposit guarantee issued by the government last week will have on borrowers who have accounts linked to their mortgages. Richard Clark, head of product development and marketing at...

PRODUCTS: Long-term deal shift on cards.
October 13, 2008... Abbey's decision to cut rates on its five-year deals may signal a shift in focus to long-term products. The lender cut its five-year fixed rate and remortgage products by 0.1%, bringing their rates down to 5.79% on 75% LTV deals while...

LENDERS: NR ahead of debt schedule.
October 13, 2008... Northern Rock has already repaid more than half its loan from UK taxpayers. Last Monday in a speech to the House of Commons, chancellor Alistair Darling revealed that the nationalised lender is ahead of its repayment schedule. NR...

GOVERNMENT BAILOUT: What do you think of the bailout?
October 13, 2008... Last week the government unveiled a massive rescue package for UK banks worth #500bn. In addition to the #200bn provided by its Special Liquidity Scheme and a guarantee for interbank lending worth #250bn, it is also offering a #50bn...

ANALYSIS: Marketwatch - 13.10.08.
October 13, 2008... Government intervention in the banking sector was a must as it was clear that the problems assailing the industry weren't going to fix themselves Swaps plunged last week, posting the biggest falls I can remember. One- year swaps have...

ANALYSIS: A waste of Mandelson's expertise.
October 13, 2008... Someone on Andrew Marr's Sunday AM TV programme recently referred to Peter Mandelson's return to the Cabinet as Prime Minister Gordon Brown's Palin factor - a shock but then it's back to square one. Substitute nausea for shock and I might...

ANALYSIS: Government puts its money where its mouth is.
October 13, 2008... At last the government has backed up its talk with decisive action. The announcement of its substantial rescue plan for the UK's banking system is something to be welcomed. It could be the start of a series of interventions that could...

ANALYSIS: Middle class borrowers feel the pinch.
October 13, 2008... The credit crunch is having a far broader effect than anyone initially imagined. After all, who could have forecast the demise of two of the most recognisable brands in the mortgage industry - Halifax and Bradford & Bingley? The...

ANALYSIS: We must see more meat on rescue plan's bones.
October 13, 2008... On September 2 the government announced a package of measures to help home owners facing financial difficulties. The plans included changes to Income Support for Mortgage Interest, a temporary change to the Stamp Duty threshold, the...

ANALYSIS: Politicians have messed up the housing market.
October 13, 2008... I was amused by a recent correspondent in Mortgage Strategy's Letters pages who queried the political allegiance of the magazine and harangued its commentators for bringing a political slant to some of their pieces. What planet are you...

ANALYSIS: Pointing clients in the right direction.
October 13, 2008... Uncertainty, volatility, and catastrophe - all these words can be applied to the financial markets right now. But while the constantly changing situation makes it difficult to write a column such as this without appearing out-of-date, it...

LETTER: Brown's bailout will lead the UK to ruin.(Letter to the editor)
October 13, 2008... An old teacher of mine used to shout "you're either a fool or a knave" and that phrase applies to Gordon Brown, Alistair Darling, Mervyn King and their media apologists. They are wrong both financially and politically. The de facto...

LETTER: Borrowers need cheaper products and higher LTVs.(Letter to the editor)
October 13, 2008... Last week's 0.5% base rate cut is welcome and should help boost mortgage enquiry levels and stimulate growth. But we must also see rate cuts on products and most importantly increases in LTV caps. Much of the market is still pricing...

LETTER: Archaic banking left my cheque at Royal Mail's mercy.(Letter to the editor)
October 13, 2008... No wonder the banking system is in trouble - #12.50 for a first-class stamp. I recently had to clear a business cheque via our bank's 'special clearance' system [bank's name and address supplied]. I advised the cashier of my request...

LETTER: Five stages of Brown's credit crunch grief.(Letter to the editor)
October 13, 2008... I have been working for the Ambulance Service for about three months and it's a breath of fresh air compared with my days as a mortgage broker. There are no regulators looking to make an example of me while letting those at the top get...

LETTER: Clearing up the confusion on Debt Buster guarantee.(Letter to the editor)
October 13, 2008... I wanted to address some of the comments made in the story headlined 'We'll top fees, says Equity Advice' (Mortgage Strategy September 29) and clarify our offering as there seems to be some confusion. Our Deal Buster offering is a simple...