Mortgage Strategy articles from September 2008

Mortgage Strategy archives from September 2008

COMMENT: It's time to cut the market some slack.
September 1, 2008... It's going to be another tough week in the City, especially for the nine members of the Bank of England's Monetary Policy Committee, who meet on Wednesday and Thursday to decide whether or not to cut the base rate. The majority of...

IN BRIEF: HBOS will fight for pole position.(Brief article)
September 1, 2008... Joe Higgins, head of HBOS Mortgages, says the lending giant traditionally takes between 20% and 25% of market share and is unlikely to give up this mantle lightly. Speaking in Edinburgh late last month, he challenged the industry to do more to...

IN BRIEF: Merrill makes disastrous losses.(Brief article)
September 1, 2008... Merrill Lynch has posted around $14bn in after-tax losses in the past year. When adjusted for inflation, this amounts to around 25% of the profits it has made in its 36 years as a public company, The Financial Times reported last week. ...

IN BRIEF: Gremlins delay BoS ranges.(Brief article)
September 1, 2008... Last Friday Bank of Scotland was forced to suspend the launch of a buy- to-let and self-cert range due to IT problems. It could not say when the products would go live. A spokesman for BoS says: "Some products had the wrong fee attached but...

YouGov identifies NR failings.
September 1, 2008... Lack of communication from Northern Rock management and the tripartite authority exacerbated consumer fears and led to the run on the bank, research from YouGov reveals. Its paper, Between a rock and a hard place, to be presented at a...

B2L healthy despite amateur fears.
September 1, 2008... Brokers are expecting buy-to-let landlords to continue investing in the market despite doubts about the next generation of investors. The Mortgage Works surveyed 2,425 brokers and found 49% expect to see established landlords increase the...

Equity release is SAFER for brokers.
September 1, 2008... Specialist Advisers for Equity Release is the name of the trade body launched today for brokers. Although it will be a rival to Safe Home Income Plans, which has been operating since 1988, SAFER founder Colin Taylor, chief executive...

AMI points the finger at FSA.
September 1, 2008... The trials and tribulations that Trustguard Credit Services' appointed representatives are suffering could be the fault of the Financial Services Authority. Chris Cummings, director-general of the Association of Mortgage Intermediaries,...

Hamptons aiming for chain reaction.
September 1, 2008... Hamptons International has launched a scheme to remove obstacles in home buying chains and help sellers struggling to move. The Hamptons Exchange smooths the way for home buying by linking up sellers in property chains, thus offering those...

IN BRIEF: SWB reports healthy profits.(Financial report)(Brief article)
September 1, 2008... Scottish Widows Bank has reported pre-tax profits of #16.4m - a 12% year-on-year rise. Net mortgage growth for the first half of 2008 was #800m, with total mortgage balances of #6.6bn. SWB says its credit quality is strong, with just 0.23% of...

IN BRIEF: Evaluate boosts lender numbers.(Brief article)
September 1, 2008... Evaluate has added Bank of Ireland, Woolwich and Chelsea to its lender offering. The move is part of its efforts to deliver a whole of market mortgage sourcing system to brokers later this year. Copyright: Centaur Communications Ltd....

IN BRIEF: Countrywide acquires broker.(Brief article)
September 1, 2008... Countrywide has bought new homes brokerage Hurst Independent Financial Services. Ray Hurst, founder of Hurst, will continue to run the firm on a day-to-day basis. Copyright: Centaur Communications Ltd. and licensors

IN BRIEF: M-Next hikes GI commission.(Brief article)
September 1, 2008... Mortgage Next has upped commission rates for appointed representatives who arrange general insurance via its online system. Commission rates for household, buy-to-let, building and contents and unemployment insurance have risen from 15% to...

IN BRIEF: Abbey unveils low fee deals.(Brief article)
September 1, 2008... Abbey has launched a range of mortgages with fees fixed at #499. The deals are available up to #250,000 and 60% LTV and include two and three-year fixed rate products and a two-year tracker. Copyright: Centaur Communications Ltd. and...

FSA tables are misleading.
September 1, 2008... The Financial Services Authority's mortgage comparison tables may do more harm than good when it comes to consumers choosing the right deals. One broker, who wishes to remain anonymous, recently advised a client to take out a two-year...

More HIP casualties expected as OpenBook shuts.
September 1, 2008... Home Information Pack providers are warning that the closure of Hipstar and OpenBook are ominous signs for the future of the sector. Hipstar was placed into administration last month and OpenBook, a provider widely recognised as a pioneer...

CRM is the key to success, says AMI.
September 1, 2008... Brokers should sharpen up their approach to customer relationship management and use the right software if they want to succeed in the coming year, the Association of Mortgage Intermediaries warned last week. Chris Cummings,...

Brokers favour societies.
September 1, 2008... Brokers are sending more business to building societies than ever before. Coventry figures reveal brokers are currently responsible for over 80% of its growth. And this upward trend is also evident at Nationwide, where brokers account for...

Brokers urged to check debt firms.
September 1, 2008... Debt solutions firm Newtomorrow.com is calling on brokers to research the companies they refer clients to for debt advice. Newtomorrow.com, which operates a broker-facing debt portal, says brokers could add to their clients' financial...

IN BRIEF: Sub-prime deals down over 80%.(Brief article)
September 1, 2008... Sub-prime deals have been slashed by over 80% since July 2007, says Moneyfacts.co.uk. The website adds that only 13 lenders now operate in the sector, down from 36 last summer. Copyright: Centaur Communications Ltd. and licensors

IN BRIEF: Brokers called on to help fight fraud.(Brief article)
September 1, 2008... The Financial Services Authority is calling on brokers to help stamp out mortgage fraud. It says they should look out for shoddy documentation, doubtful income details and links between different clients such as addresses or bank accounts. ...

Kensington to bolster panel.
September 1, 2008... Kensington's decision last week to increase its packager panel could lead other lenders to follow suit, Vic Jannels, chairman of All Types of Mortgages, predicts. The specialist lender confirmed last week that it is in talks with a...

City boys feel pinch and stop buying.
September 1, 2008... A study of the large loans market by Mortgages.co.uk has revealed a whopping 33% fall in purchases. It carried out an analysis of mortgage searches on its website that led to transactions of over #500,000 in June, July and August 2007...

FSA threatens lenders over change in charges.
September 1, 2008... The Financial Services Authority has lenders in its sights over changes made to borrowers' mortgage charges post-completion. Some 18 months after the regulator issued a guidance note to lenders on good practice relating to charge...

IN BRIEF: Credit licensing regime to change.(Brief article)
September 1, 2008... The Office of Fair Trading is calling for secured loans firms to prepare for changes to the consumer credit licensing regime. From October 1 firms offering debt administration or credit advice will need licences to access information from...

NR repossessions revealed.
September 1, 2008... Research from Standard & Poor's reveals Northern Rock is responsible for originating the mortgages for one in 13 properties repossessed in the first half of 2008. The figures show NR's securitisation vehicle Granite is responsible for...

Coventry beefs up offset range.
September 1, 2008... Brokers are praising Coventry for injecting more competition into the offset market. Last week the mutual launched additional products to compete with Intelligent Finance, Royal Bank of Scotland, Abbey and Brittania in the sector. IF...

IN BRIEF: LV= joins Intrinsic panel.(Brief article)
September 1, 2008... LV= has been added to Intrinsic Financial Services' panel of equity release providers, giving the network's 1,300 members access to its products. Copyright: Centaur Communications Ltd. and licensors

IN BRIEF: Trio of products to update searches.(Brief article)
September 1, 2008... OneSearch Direct has launched three products to enable buyers to update property searches included in Home Information Packs. The products - Validate, OneSearch Now and OneSearch - have been developed in partnership with conveyancers. ...

Cable slams Stamp Duty idea.
September 1, 2008... Vince Cable slammed the government's rumoured plans for a Stamp Duty holiday as he unveiled Liberal Democrat proposals to tackle insufficient housing stock and soaring repossession levels. Cable, shadow chancellor for the Lib Dems, says:...

Keep tenants in repossession loop, says Shelter.
September 1, 2008... Shelter is calling on lenders repossessing buy-to-let properties to warn tenants about the situation so they don't end up on the street. The housing charity says buy-to-let repossessions more than doubled between the first half of 2007 and...

Brokers question pessimism report.
September 1, 2008... Brokers are unconvinced by research from Legal & General that suggests growing pessimism about the future of the mortgage market. L&G polled 248 brokers in its Partnership Services mortgage network in July and found that 45% of...

Calls to scrap HIP searches.
September 1, 2008... Industry trade bodies are calling on the government to scrap property searches within Home Information Packs to save home buyers time and money. The National Association of Estate Agents is one of three trade bodies leading the charge...

A&L cuts fees and rates across range.
September 1, 2008... Alliance & Leicester has reduced rates across its mortgage range by up to 0.55%. The lender is also cutting fees from 2% to 1% and launching an 85% LTV prime purchase product. Richard Taylor, head of mortgage products at A&L, says:...

Mortgage approvals plunge 65%, says BBA.
September 1, 2008... Approvals for house purchases plummeted 65% to 22,448 in July this year compared with July 2007. Figures from the British Bankers' Association last week also revealed net mortgage lending rose by #4.3bn in July - the same amount as the...

IN BRIEF: BoE deputy warns crisis will drag on.(Brief article)
September 1, 2008... Charles Bean, deputy governor of the Bank of England, has warned that the current economic downturn is as bad as the situation in the 1970s and is likely to drag on for some time. Bean says he has his fingers crossed that things will improve...

IN BRIEF: Equity Release Club adds to panel.(Brief article)
September 1, 2008... Equity Release Club has added reversion specialists Home & Capital and Dunfermline to its panel. It now offers access to seven home reversion and nine lifetime mortgage providers. Copyright: Centaur Communications Ltd. and licensors

ANALYSIS: Market watch - 01.09.08.
September 1, 2008... Swaps edged up slightly last week but are hugely down on a month or so ago. Meanwhile, three-month LIBOR has fallen to 5.75%. * One-year money is up 0.02% at 5.58% * Two-year money is unchanged at 5.38% * Three-year money is up...

ANALYSIS: Coventry sends itself to top of the pile.
September 1, 2008... A couple of weeks ago I was tempted to write a piece suggesting that the financial services industry was in danger of going the same way as UK car makers did back in the early 1970s. In those days we used to argue that while Hondas might...

ANALYSIS: Brokers must rediscover the word 'no'.
September 1, 2008... Research commissioned by GE Money Home Lending has estimated that over the past 18 months some 3.4 million borrowers have been turned down for a mortgage at least once, with a further 450,000 applying four or more times before their...

ANALYSIS: Beating inflation is our paramount aim.
September 1, 2008... Remember the 1970s? Starsky & Hutch, Saturday Night Fever and inflation. Back in 1997, one of the new Labour government's first decisions was to make the Bank of England independent and it was put in charge of fighting inflation. Memories of...

ANALYSIS: What we can learn from the Olympics.
September 1, 2008... What an Olympics it was for the UK. You have to admire our athletes, particularly our cycling, sailing and rowing teams. I was intrigued to hear Stephen Park, the sailing team's manager, being interviewed on the BBC and giving his take on...

ANALYSIS: Order of the phoenix firms is growing.
September 1, 2008... The phrase 'phoenix firm' may conjure up images of rebirth but many in the mortgage and loan industries wish these companies would stay dead and buried. According to Greek mythology the phoenix burnt itself at the end of its life cycle...

ANALYSIS: I love it when a plan comes together.
September 1, 2008... The majority of readers may dismiss my belief that now is the time to put to bed your 12-month business plan for 2009. For the 15 years I worked in senior positions with three blue chip companies, September was the time we usually signed...

LETTER: The devil is in the detail of council mortgage plan.(Letter to the editor)
September 1, 2008... I've been reading with great interest the national press coverage of local authority chiefs calling for the power to offer competitive mortgages in an effort to rescue the housing market. Under the plan, councils would sell #2bn worth of...

LETTER: Times are hard enough without unqualified pundits.(Letter to the editor)
September 1, 2008... As a mortgage broker trying to make an honest living in a difficult market, I'm writing because I am sick of reading articles by people who with a little research think they can comment on the market. Others who are even less qualified have...

LETTER: Self-cert smokescreen is a way to ration lending.(Letter to the editor)
September 1, 2008... We live in a mortgage world lacking common sense, as Robert Winfield pointed out in his letter last week (Mortgage Strategy August 25). Whenever the market swings too far one way, there's always an overcorrection in the opposite...

LETTER: FSA comparison site doesn't give clients all the facts.(Letter to the editor)
September 1, 2008... I recently advised a client to take out a two-year fixed rate product at 5.74%. At the client's request I emailed him the Key Facts Illustration before visiting him. He clicked on the FSA link shown on the KFI, which took him to its product...

LETTER: Sub-prime customers have been hit hard by crunch.(Letter to the editor)
September 1, 2008... Until July last year the sub-prime market was a growing sector offering 8,148 residential mortgage products compared with just 1,252 today. Many lenders realised there was an increasing number of consumers with blemishes on their credit...

LETTER: FSA should look at lenders that turned a blind eye.(Letter to the editor)
September 1, 2008... I read with interest Nick Baxter's article entitled 'Delinquents are running out of space' (Mortgage Strategy August 25). He mentions how lenders have provided details of over 200 more brokers requiring investigation, which can only be a...

IN THE LINE OF FIRE: Target practice.
September 1, 2008... The regulator has had self-cert brokers in its sights since the BBC exposes of the sector but it remains a good product if handled with care, says Robert Thickett Self-cert mortgages have long been the bete noire of the mortgage industry....

Changes to the way self-cert is done will ensure the product's future.
September 1, 2008... Martin Reynolds is corporate manager at Premier Mortgage Service Virtually since its inception, self-cert has had to suffer a Daily Mail- style doom mongering campaign. Nevertheless, some 20 years later it is still going strong. But...

The industry has upped its self-cert game.
September 1, 2008... Andy McQueen is managing director of The Mortgage Works Scrutiny of the self-cert market is nothing new. Whether it's television documentaries or the spate of regulatory action earlier this year involving brokers accused of self-cert...

MPC: SHADOW MPC.
September 1, 2008... Although the economy is stagnating, inflation, which is running at 4.4%, poses the main threat so Mortgage Strategy's GE Money Home Lending Shadow Monetary Policy Committee has decided to hold the base rate this month Melanie Bien,...

COMMENT: Beware developers' loan schemes.
September 1, 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 Developers are turning to desperate measures to shift unsold stock as they try and stop their...

COMMENT: Council mortgages is latest bad idea from Darling.
September 1, 2008... As if to underline his incompetence, chancellor Alistair Darling has come up with another bad idea - the reintroduction of council mortgages. I don't know where Darling thinks local authorities are going to get wholesale mortgage funding...

COMMENT: Yourshout - 01.09.08.
September 1, 2008... Question: My client's #106,000 mortgage is made up of a #27,150 repayment and a #78,850 interest-only facility and ends in nine years. The interest-only part is covered by three endowment policies, two of which mature in five years. The...

COMMENT: Olympic success' feel-good factor.
September 1, 2008... Team GB has had a great Beijing Olympics and has given the nation a boost but lenders should take a leaf out of our athletes' excellence by providing us with better service, says Sue Read I've said it before and I'll say it again - it's...

COMMENT: Time for sex, truth and measuring tape.
September 1, 2008... Sex sells in the property world. Cynthia Payne's sex parties helped put Streatham on the map and any surveyor worth their salt will have valued brothels in the big city, says Simon White I'm no prude. In fact, I rather approve of the use...

COMMENT: Mixed predictions for housing market.
September 1, 2008... Capital Economics says it will take decades for house prices to recover but more optimistic forecasts are closer to the mark and property will remain a good long-term bet, says Sally Laker Unsurprisingly, the mortgage trade press has been...

COMMENT: Don't believe the hype about a crash.
September 1, 2008... Media sensationalism is having a negative impact on consumer confidence but context is everything and it is up to brokers to let clients know that the end isn't nigh, says Mark Harris Headlines are designed to catch the eye and draw...

COMMENT: Labour sidesteps the biggest issue.
September 8, 2008... We've said it before and we'll say it again - the so-called mortgage rescue plan announced by the government last week was a wasted opportunity. A year-long Stamp Duty holiday for loans up to #175,000 is little more than a political sticking...

IN BRIEF: Conflicting confidence data.(Brief article)
September 8, 2008... Differences have emerged between Financial Services Authority data and independent research into consumer confidence following the Northern Rock fiasco. YouGov recently carried out a poll of NR savers as part of the only consultation with...

IN BRIEF: Bear could have slain big three.(Brief article)
September 8, 2008... According to an analysis by JP Morgan Chase, the Bear Stearns debacle earlier this year could have brought down Lehman Brothers, Merrill Lynch and Morgan Stanley. It says that each firm's exposure meant that all three could have failed...

IN BRIEF: Salt pulls out of market.(Brief article)
September 8, 2008... Salt is to withdraw from the residential mortgage market. Its deadline for direct business is 6pm on September 12, while packager applications with decisions in principle must be received by 6pm on September 19. Copyright: Centaur...

Nervous wait for GMAC staff.
September 8, 2008... Sources close to GMAC-RFC say staff at the firm will have to wait until the end of September to discover whether they will share the fate of the 5,000 US workers axed by parent firm GMAC. Last week GMAC unveiled cuts at subsidiary ResCap,...

Wave on brink of crashing, say sources.
September 8, 2008... Industry sources are adamant that Merrill Lynch is to close Wave. The US investment bank has refused to comment on the rumours but sources close to Merrill have confirmed to Mortgage Strategy that 25 to 30 staff risk losing their jobs,...

Paymentshield to link with Trigold platform.
September 8, 2008... Paymentshield will link its Inertia software to Trigold's Prospector AAA platform in the coming months. The insurance distributor says the partnership will bolster broker income by providing Trigold's 25,000 subscribers with immediate...

IN BRIEF: A failure to tackle liquidity.(Brief article)
September 8, 2008... The Intermediary Mortgage Lenders Association says the government's mortgage rescue package fails to address underlying liquidity problems but hopes the completion of Sir James Crosby's housing finance review will free up additional funding...

IN BRIEF: Short-term tinkering.(Brief article)
September 8, 2008... Connells Survey and Valuation brands the rescue plan short-term tinkering and says the government must pave the way for lenders to recapitalise their balance sheets. Copyright: Centaur Communications Ltd. and licensors

IN BRIEF: Tax change won't help South-East.(Brief article)
September 8, 2008... The National Association of Estate Agents says changes to Stamp Duty won't have a significant impact in the South-East but that the move is a step in the right direction. Copyright: Centaur Communications Ltd. and licensors

IN BRIEF: A boost for social housing.(Brief article)
September 8, 2008... The Home Builders Federation says it supports the rescue plan as a tool for advancing investment in social housing but action is still needed to address funding constraints. Copyright: Centaur Communications Ltd. and licensors

FTB plan dubbed dangerous.
September 8, 2008... Mortgage expert Jonathan Cornell has branded the government's mortgage rescue plan offering first-time buyers interest-free 30% loans to buy new-build properties dangerous and short-sighted. The #300m scheme forms part of a #1bn plan...

CML bemoans slow progress on arrears protocol.
September 8, 2008... The Council of Mortgage Lenders has lashed out at the Civil Justice Council for its inability to finalise an arrears protocol for lenders. In a letter to chancellor Alistair Darling, the CML outlines what it is doing to help home owners...

Overhaul Stamp Duty, say experts.
September 8, 2008... Industry figures have called for a root and branch reform of Stamp Duty in response to the government's tax holiday for properties valued at #175,000 and below. Last week Prime Minister Gordon Brown unveiled his mortgage rescue plan,...

Portal poised for launch.
September 8, 2008... Rachel Bancroft, former managing director of KGB Packaging, will launch her one-stop mortgage portal on October 1. Mortgage-Portal.co.uk will provide brokers with ideas for boosting revenue. It will feature more than 30 product and service...

Budget flight cuts won't hit prices.
September 8, 2008... The reduction in the number of low-cost flights to property hotspots poses no threat to the value of overseas property, says Conti Financial Services. The rising cost of fuel has forced Ryanair to cut back on the number of flights to...

IN BRIEF: Skipton offers 95% LTV deals.(Brief article)
September 8, 2008... Skipton is to offer first-time buyers 95% LTV deals through its Mutually Exclusive scheme. From September 15 its account holders can access the deals if they or a family member put 20% of the property's value into one of the mutual's...

Don't give up on remortgages.
September 8, 2008... Brokers should not be discouraged by falling remortgage approvals because business may be placed at a later stage, says Alexander Hall. Andy Pratt, chief operating officer at Alexander Hall, says: "There are a lot of customers who want and...

TMW to allow online portfolio B2L applications.
September 8, 2008... The Mortgage Works is to bolster its online proposition by allowing brokers to input details of portfolio buy-to-let applications for the first time. The service will go live next week, allowing brokers to enter the details of up to two...

Brokers warned on equity release.
September 8, 2008... Experts have warned that equity release could be a ticking compliance time bomb for brokers new to it. Julie Alderson, director at compliance consultancy Management Solutions 2000, compares equity release with pensions and endowments,...

IN BRIEF: CML scheme on builder incentives.(Brief article)
September 8, 2008... The Council of Mortgage Lenders is calling on developers to disclose incentives to ensure new-build homes are valued accurately. CML members will ask new-build developers to complete a disclosure of incentives form. The CML believes...

Trade bodies seek members.
September 8, 2008... RAMP and AMPD will battle for members after plans to form a unified alliance were scrapped. John Rice, managing director of the Regulatory Alliance of Mortgage Packagers, has shelved plans for a single association and will instead focus on...

Yorkshire unveils comparison site.
September 8, 2008... The Yorkshire has launched a conveyancing price comparison website for consumers. It has been created in conjunction with eConveyancer and follows hot on the heels of the Yorkshire's online conveyancing service for borrowers which was...