Mortgage Strategy articles from September 2007

Mortgage Strategy archives from September 2007

COMMENT: It may be too little too late from Dubya.
September 3, 2007... George Bush finally got off his presidential behind last week and waded into the US sub-prime crisis with a series of reforms designed to calm the market's jitters. In the US, many industry figures have called on the White House to start...

Credit crunch forces lenders to slash proc fees.
September 3, 2007... A sub-prime pundit has warned that incorrect pricing by lenders will result in reduced proc fees hacking into brokers' margins. Last week, Preferred confirmed that from September 10 it will cut its proc fees by an average of 0.13%. This...

Brokers sell two in three mortgages.
September 3, 2007... Brokers now sell two in three mortgages, research conducted by Network Data for Mortgage Strategy reveals. Figures from the Council of Mortgage Lenders show #345bn in mortgage business was undertaken in 2006, of which brokers generated...

GMAC makes #1.1bn portfolio sale to B&B.
September 3, 2007... GMAC-RFC has made a #1.1bn portfolio sale to Bradford & Bingley following weeks of speculation over its funding. The deal comprises prime, self-cert and buy-to-let assets. Following a 0.75% hike in its sub-prime rates and a criteria tweak...

IN BRIEF: Bush reacts to sub-prime crisis.(Brief article)
September 3, 2007... US President George Bush has unveiled an action plan to help home owners hit by the sub-prime crisis to avoid foreclosure. Proposed measures include more accurate disclosure requirements and a broker registration system. He also called for the...

IN BRIEF: Barclays owns up to BoE loan.(Brief article)
September 3, 2007... Barclays has admitted to borrowing hundreds of millions of pounds from the Bank of England. The lender says the loan was needed to cope with a breakdown in the UK clearing system and denies it will be used to deal with liquidity problems....

IN BRIEF: Sub-prime lenders hike rates.(Brief article)
September 3, 2007... Several lenders adjusted their sub-prime rates last week. High Street Home Loans increased rates by 1% across its Libor discounted and fixed rate products. Cheltenham & Gloucester is increasing rates on its sub- prime assist and access deals...

IN BRIEF: Money Partners raises Origin rates.(Brief article)
September 3, 2007... Money Partners increased rates across its Origin range by 0.75% from September 1. This excludes prime rates, which have risen by 0.35%. The lender's variable rate will be 6.8% and commission levels will remain unchanged. Copyright:...

IN BRIEF: Sales head for the One account.(Brief article)
September 3, 2007... RBS Intermediary Partners has appointed Melanie Buckingham as head of sales for the One account. RBSIP says Buckingham has been recruited to boost the sales of its current account and flexible mortgages in the broker market. Copyright:...

IN BRIEF: ABI rejects gay discrimination.(Brief article)
September 3, 2007... The Association of British Insurers has proposed axing insurers' exemptions from sexual orientation regulations. It says insurance firms see no need to differentiate between civil partnerships and married couples for insurance purposes. ...

IN BRIEF: Landlords snub deposit protection.(Brief article)
September 3, 2007... More than three out of four landlords haven't registered for tenancy deposit protection, says the National Landlords Association. It estimates that although about 150,000 landlords have registered with the government-backed scheme, the...

Barclays' US arm cuts staff.
September 3, 2007... EquiFirst Corporation of North Carolina, the US sub-prime lending arm of Barclays, cut half its workforce last week, industry sources say. A spokeswoman for EquiFirst confirms that lay-offs have occurred but declined to give a headcount....

Almost half of readers would buy mortgage online.
September 3, 2007... Mortgage Strategy Online readers are split on the benefits of buying mortgages online, with 48% saying they would use the internet to find a mortgage and 52% saying they wouldn't. This follows the admission made by Simon Nixon, chief...

Farr is appointed director of AMI.
September 3, 2007... The Association of Mortgage Intermediaries last week named Richard Farr, former head of marketing at Portman, as its new director. Farr took a redundancy package from Portman in July, but said at the time his departure was unrelated to the...

Fake document websites could be hard to close.
September 3, 2007... The detective leading an investigation into mortgage fraud has admitted moves to shut down websites providing fraudulent documents could be stalled by their foreign locations. Last week, the City of London Police's economic crime...

Consistent data on defaults needed.
September 3, 2007... The Information Commissioner's Office is urging lenders to adopt a consistent approach to filing loan defaults. Last week Richard Thomas, the information commissioner, told lenders to treat borrowers reported to credit agencies as fairly...

IN BRIEF: Co-op launches 25-year green deal.(Brief article)
September 3, 2007... The Co-operative is launching a 25-year fixed rate mortgage at 5.99% with a #499 application fee that offers annual donations to carbon offsetting firm Climate Care. Clients will also benefit from free home energy reports. Copyright:...

IN BRIEF: Firm launches packager software.(Brief article)
September 3, 2007... MortgageStream is targeting packagers with PackageStream, its latest software processing system. The system is designed to help packagers manage their workflows more effectively. Copyright: Centaur Communications Ltd. and licensors

IN BRIEF: Paaleads unveils community forum.(Brief article)
September 3, 2007... Paaleads.com has launched a community forum on its website. It can be viewed by anyone, but only members are able to post messages. Vanessa Blount, head of Paaleads. com, says: "The forum will only be lightly policed, so comments are there...

Tories slam housing plans.
September 3, 2007... The Conservative Party has warned that Prime Minister Gordon Brown's plan to build three million new homes on government-owned brownfield land could lead to unsustainable urban sprawl. In July, Brown outlined plans to build the homes...

Belfast Expo to tap into Northern Ireland market.
September 3, 2007... The Mortgage Business Expo is spreading its wings and embarking on its first Northern Irish event, to be held in Belfast on January 30 next year. The growing number of lenders and brokers working in Northern Ireland has prompted Expo...

Repossessions up 32%, says RICS.
September 3, 2007... Research from the Royal Institution of Chartered Surveyors reveals that repossessions in Q2 2007 rose by 32% compared with the first three months of the year. The majority of repossessions were in the North-West, where auction activity...

IN BRIEF: KPMG predicts insolvency record.(Brief article)
September 3, 2007... KPMG predicts there will be a record 120,000 personal insolvencies this year. The warning came as the latest figures from the Insolvency Service revealed personal insolvencies dipped 8% this quarter but were up 28% on 2006. Copyright:...

IN BRIEF: Clients aware of equity release.(Brief article)
September 3, 2007... Consumer awareness of equity release is higher than expected, says Retirement Plus. Its first independent research into the subject shows that 57.6% of clients had heard of equity release. Copyright: Centaur Communications Ltd. and...

IN BRIEF: Click points to secured loan route.(Brief article)
September 3, 2007... Click says that some consumers should bypass redemption charges and opt for secured loans to free up capital before their fixed rate terms come to an end. Copyright: Centaur Communications Ltd. and licensors

Brokers see automated underwriting future.
September 3, 2007... A whoPping 89% of brokers believe automated underwriting is the future, a report from Alliance & Leicester reveals. But the lender warns that technology is no substitute for bespoke services offered by underwriters. Jeremy Claridge,...

GMAC hires Wembley for TCF event.(Conference news)
September 3, 2007... GMAC-RFC is holding a Treating Customers Fairly conference for its packager partners at Wembley Stadium. The event, to take place in Wembley's Pitch View Room on October 9, has been named The Cup Final because of the prestigious venue....

IN BRIEF: Brokers benefit from B2L boom.(Brief article)
September 3, 2007... Research from Paragon Mortgages shows brokers have been enjoying increased business from the buy-to-let sector. Strong tenant demand on the back of weakness in the wider housing market has led to rental income accelerating. Over the past year,...

IN BRIEF: Woolwich unveils two products.(Brief article)
September 3, 2007... Woolwich has unveiled two deals. The first product is for first-time buyers and is fixed for two years at 6.29% with no higher lending charge up to 95% LTV. The second deal is a lifetime tracker at Bank of England base rate plus 0.17%. ...

Property is best investment.
September 3, 2007... Growth in prime central London property values has been more stable than the FTSE 100 over the past decade, analysis by investment scheme London Central Portfolio has revealed. Naomi Heaton, chief executive of LCP, says property investment...

Trustguard to host industry summit in Bristol.
September 3, 2007... Trustguard Credit Services is to hold an industry summit to give brokers a chance to air their views. The event, on September 27 at the Hilton hotel in Bristol, will also be attended by lenders that will brief delegates on criteria...

AfI boss slams risky B2L deals.
September 3, 2007... Abbey for Intermediaries' managing director Ricky Okey has slammed buy- to-let loans with a combination of 95% LTV and 95% rental calculations as being suicidal. In a round table debate for a special supplement on buy-to-let with this...

Cheap websites for brokers.
September 3, 2007... A web design company is offering brokers the chance to establish an online presence and keep in touch with their clients. Riskmedia.co.uk was launched in February this year by managing director Boris Mavra, who worked in banking and...

Average first-timer mortgage up 173%.
September 3, 2007... The average first-time buyer mortgage has increased by 173.6% in 10 years, Mform.co.uk reveals. The website says that in 1996 the average first-time buyer mortgage was #39,811, but by 2006 this had increased to #108,917. If this trend...

Law firm warns lenders of free legals danger.
September 3, 2007... Goldsmith Williams has warned that lenders offering free legals with remortgage products could be vulnerable to customer complaints. The warning comes in light of new powers of redress being offered to consumers after the Legal Complaints...

IN BRIEF: KGB deals via Mortgage Brain.(Brief article)
September 3, 2007... KGB Packaging has launched its products on Mortgage Brain's sourcing system. Applications for its packaged lenders' core products can also be submitted electronically via the Mortgage Trading Exchange. Copyright: Centaur Communications...

IN BRIEF: Website launches portfolio builder.(Website overview)(Brief article)
September 3, 2007... Thepropertyinvestmentmarket.com has launched a portfolio builder enabling investors to build portfolios without selecting properties themselves. Investors need #1,000 to open an account, with their cash spread equally across the 10 most popular...

IN BRIEF: July lending up 12%, says BBA.(Brief article)
September 3, 2007... Data from the British Bankers' Association says July's gross mortgage lending was 12% higher than July 2006 at #21.3bn. The figure reflects higher levels of remortgaging. Copyright: Centaur Communications Ltd. and licensors

IN BRIEF: Islamic provider unveils B2L deals.(Brief article)
September 3, 2007... Islamic finance provider alburaq has launched two buy-to-let deals. The first is a 'pay one, get one free' offer on buy-to-let valuation fees and the second is a #100 cashback offer on applications submitted before September 30. The first...

IN BRIEF: Link appoints risk assessor.(Brief article)
September 3, 2007... Link Lending has appointed Yolanda Bester as a risk assessor. She joins from Mortgage Express. Her responsibilities will include making recommendations on cases that are outside lending criteria. Copyright: Centaur Communications Ltd. and...

IN BRIEF: Three BDMs join Mortgage Trust.(Brief article)
September 3, 2007... Mortgage Trust has appointed three BDMs. Jason Wilde will cover Essex and East Anglia, Shelagh Killeen will focus on the North-East and Richard Lunn will cover the South-East. Copyright: Centaur Communications Ltd. and licensors

Would you prefer to buy mortgage online or face-to-face with broker?
September 3, 2007... In his first trade press interview since floating his company, Moneysupermarket.com chief executive Simon Nixon admitted that he would never buy a mortgage online. He says that while the number of consumers feeling comfortable about buying...

ANALYSIS: Market watch - 03.09.07.
September 3, 2007... Swaps increased last week. At one point one-year swaps hit a high of almost 6.5% before edging back down slightly. No single economic event seemed to cause the increases, but my hunch is that they may have been linked to the news that...

ANALYSIS: Impact on US sub-prime credit crunch having on UK brokers?
September 3, 2007... Brokers will have to tread carefully and work together with packagers and lenders to get through the current market conditions, say our experts Barry Meeks is managing director of Pink Home Loans The repercussions of the US sub-prime...

ANALYSIS: Let Labour swim in its own snake oil.
September 3, 2007... If the Home Information Pack was an animal, you'd have to put it down. The poor thing is in such obvious distress. And although we couldn't possibly countenance euthanasia when it comes to human suffering, animals are a different ball game....

ANALYSIS: Front-end plans need back-end IT.
September 3, 2007... A booming economy, rising house prices and low arrears spell dull times for people in mortgage servicing. But as rates and arrears have risen those responsible for managing the #1trillion of existing mortgages have to work harder. By...

ANALYSIS: Buy-to-let curbs will take toll on landlords.
September 3, 2007... The past few weeks have been tough for the sub-prime market and, you might think, for the mortgage sector as a whole given the recent turbulence in the stock markets. But it seems there is still no sign of a slowdown, if the latest...

ANALYSIS: Old HIP searches could end in client punch-ups.
September 3, 2007... Credit where it's due, the anti-Home Information Pack protestors are proving to be excellent tacticians. The recent hullabaloo sparked by anxiety that major lenders including HSBC and Barclays will not accept personal local searches for...

ANALYSIS: Clients will lose out if mutuals wither away.
September 3, 2007... The loss of another society brings up the question of how long mutuals will survive, because it would be a shame if they died out. The recent takeover of Portman by Nationwide saw the movement lose another member. And with the likes...

ANALYSIS: Sub-prime chaos seeps down to public.
September 3, 2007... As I write this column the sun is blazing onto my patio for the third day in a row - surely a first for this summer. And given we're all enjoying the weather, perhaps it is the least appropriate time to talk about clouds. But it seems...

ANALYSIS: Time to prospect the online gold mine.
September 3, 2007... The idea of scribbling down a message of national importance, attaching it to the leg of a pigeon and hoping the bird will fly hundreds of miles and deliver it in good time is ridiculous. In today's world, carrier pigeons seem like...

ANALYSIS: BuildStore helps brokers sell its deals.
September 3, 2007... Regular readers will know that I often encourage product providers to help their distributors sell particular products and extol the virtues of those that do. The reason many firms don't do this is that it is often difficult to do a...

ANALYSIS: Nationwide merger will create a stronger lender.
September 3, 2007... Last week another name disappeared from the mutual sector as Portman became part of Nationwide. But this isn't yet another tale of a minnow being swallowed by a bigger society. The merger of the UK's largest society with the...

ANALYSIS: Bank of mum and dad can only take us so far.
September 3, 2007... The recent news that parents on average are paying #21,314 to help their children get on the property ladder should not be earth- shattering for the industry. Neither should it come as too much of a surprise that first-time buyers are...

ANALYSIS: Time for brokers to spread their wings.
September 3, 2007... As the ripples from the US sub-prime meltdown spread across the globe, speculation is rife about whether we will follow in the US example and see sub-prime lenders going under. Speculation has intensified over the past few weeks as an...

ANALYSIS: Scrapping regulation is not feasible.
September 3, 2007... I have read with interest the recent proposals by the Conservative Party's Economic Competitiveness Policy Group relating to the mortgage market and regulation. The group has proposed a number of changes and the ones of interest to brokers...

ANALYSIS: Move fairness to the top of your agenda.
September 3, 2007... Treating Customers Fairly is still firmly on the Financial Services Authority's agenda and those companies that are not well on the way to embracing it are in for a shock. The implementation of TCF is one of the regulator's top objectives...

ANALYSIS: Key indicators for the base rate's future.
September 3, 2007... Events in the US sub-prime sector have made their mark on the mortgage market here, affecting lenders' product designs and borrowers' appetites. The base rate increases seen over the past year have also hit the market, which is now...

ANALYSIS: Offshore clients offer fresh revenue.
September 3, 2007... A major issue for brokers in these uncertain times is how to generate additional income. The solution is often in an area that many of them have ignored because of a lack of knowledge or understanding. Despite recent problems,...

ANALYSIS: Give clients a reason to come back.
September 3, 2007... The appalling weather we have experienced this summer and the disruption caused to thousands as floods swept through their homes is a salutary reminder of what matters most to clients - their families, their homes, their livelihoods and their...

ANALYSIS: What to look for with impaired rates.
September 3, 2007... In the past, providers of equity release products had varying views about providing impaired rates. Many were concerned by the fact that clients' life expectancies could change over a short period of time because of medical advancements, which...

ANALYSIS: Time to get our heads out of the sand.
September 3, 2007... A study by Eurocare has found that Britain has among the worst five- year cancer survival rates of any country in Europe. Only the Czech Republic, Slovenia, Poland and Denmark fare worse. Eurocare compiled the statistics by studying the...

LETTER: Lenders' online offerings are not serving consumers well.(Letter to the editor)
September 3, 2007... From Peter Ballard Regarding Simon Nixon's comments about online purchasing in Mortgage Strategy last week, we conducted research earlier this year and found that customers have the same appetite for arranging mortgages online as many...

LETTER: HIP providers' add to confusion surrounding initiative.(Letter to the editor)
September 3, 2007... From Danny Lovey The fiasco over Home Information Packs has been brought about not only by the government not listening but also the arrogance of the Association of Home Information Pack Providers and its spokesmen Mike Ockenden and Paul...

LETTER: Brokers should think about offering clients secured loans.(Letter to the editor)
September 3, 2007... From Dave Rogers I was dismissive of secured loans until recently, so what has made me look more closely at them? With rates rising it is problematic to suggest capital-raising remortgages. Also, the fashion for keeping published...

MPC: Shadow MPC.
September 3, 2007... These are uncertain times, as there's been good news on inflation but bad news thanks to the US sub-prime crisis. In light of the credit crunch and the dip in inflation figures, the Mortgage Strategy GE Money Home Lending Shadow Monetary...

NET PROFIT: Web master.
September 3, 2007... From humble beginnings with a photocopier and a dream, Simon Nixon went on to launch website Moneysupermarket.com and is worth about #480m - not bad for a college dropout, says Robyn Hall When Simon Nixon started his career as a mortgage...

FEATURE: A place in the sun.
September 3, 2007... Brits' love affair with overseas property continues, but emerging markets such as Turkey are rivalling old favourites like Spain, says Simon Conn All eyes are on the domestic mortgage market following the problems in the US sub-prime...

COMMENT: FSA juggernaut to crush commission.
September 3, 2007... Kevin Paterson takes a weekly look at the latest developments in the market and brings you what's hot and what's not in the world of mortgages The Financial Services Authority recently published its Retail Distribution Review. If you...

COMMENT: Lenders and brokers advance to responsibility.
September 3, 2007... As we all know, the FSA has been trying for years to get brokers and lenders to responsibly assess clients' situations and recommend or lend accordingly. Indeed, the FSA's latest review revealed that many brokers and lenders were still not...

COMMENT: UK feels weight of the credit crunch.
September 3, 2007... Early claims by lenders that the US sub-prime crisis would not affect us here have proved woefully inaccurate, with product ranges being pulled or repriced, says Rob Griffiths You would have thought that taking a couple of weeks off in...

COMMENT: Buy-to-let bucks market trend and keeps on booming.
September 3, 2007... From one booming sector where it looks like the brakes are being applied to one that seems to go from strength to strength. The Council of Mortgage Lenders' recent figures on buy-to-let market make for encouraging reading, especially...

COMMENT: Council Homebuyers.
September 3, 2007... In my column in the August 13 issue of Mortgage Strategy, I referred to the recent fine issued by the Financial Services Authority against Council Homebuyers. I'd like to clarify that the full name of the firm hit with the fine was Council...

COMMENT: Tories overlook the broker factor.
September 3, 2007... A Conservative think tank's proposal to scrap mortgage regulation ignores the market's growing complexity and the vital role brokers play in borrowers' choice of products, says Bill Warren Conservative Party think tank the Economic...

COMMENT: Packager power - 03.09.07.
September 3, 2007... With websites such as Replicadoc.co.uk offering fake documents including payslips and bank statements, how do you ensure that clients' documents are authentic? And how prevalent are fake documents in the industry? Bill Dudgeon is...

DEAR DELIA: Buy-to-let mortgage.
September 3, 2007... John and Elizabeth want to buy a three-storey townhouse worth #395,000. Together they earn more than #100,000 a year. They own a property valued at #400,000 and want to put down a #150,000 deposit. They plan to occupy the house in two to...

COMMENT: How parents can help their children.
September 3, 2007... With house prices rising, parents can help their kids get on the property ladder by releasing equity in their homes and passing it on through inter-generational gifting, says Jayne Almond The rapid rise in house prices has created something...

COMMENT: Time to get real about lending terms.
September 3, 2007... Slapdash lending to any and all clients is not just a feature of the sub-prime market, so it is time to tighten lending criteria and end unrealistic rates across the industry, says Sue Read As ever, it seems that when my back is turned,...

COMMENT: Go green and consumers will follow.
September 3, 2007... Despite a recent survey showing that consumers' environmental consciences do not yet stretch to financial products, US experience suggests that it pays to go green early, says Sally Laker Going green is important to a lot of people these...

COMMENT: Borrowers face a portable problem.
September 3, 2007... Many lenders are failing to highlight the fact that certain fixed rate mortgages may not be portable when a borrower moves home after changing employment status, says Katie Tucker A fortnight ago we had an interesting scenario involving a...

CurriculumVitae: Ted York.
September 3, 2007... Name: Ted York Age: 60 Company: Berkeley Alexander Job title: Managing director Where do you live? Lewes, East Sussex Describe your current job: I manage a wholesale broker providing products for mortgage brokers,...

ME & MY CAR: Stephen Hayter.
September 3, 2007... Stephen Hayter sales and marketing director, My Home Move Ever since I saw 1960s icon Patrick McGoohan in one as a kid I've wanted to own a Caterham, and although it's basic it packs a punch and I wouldn't trade it in for a new model, says...

TRAINING DAYS: Tim Jones.
September 3, 2007... Mortgage Strategy follows the career of graduate Tim Jones as he sets out on his mission to qualify as a London broker After getting my foot in the door, my job at Capital Fortune rested on a probation period - a two-day test that would...

THIS WEEK'S DILEMMA: Underperformance of new recruite.
September 3, 2007... I've been frantically trying to manage the underperformance of a new recruit who has been with us for three months. In his role as a broker he consistently does his own thing and while paying lip service to my instructions seems happy to...