Mortgage Strategy
4 March 2002
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$2.06 Trillion in ༽ shatters US production record
5 Mar 2002
Boosted by a robust housing market and a tidal wave of refinancings, residential lenders cracked the $2 trillion mark in loan production last year, setting a new all-time origination record. According to figures compiled by National Mortgage News and its affiliate, the Quarterly Data Report, lenders not only shattered the previous three-year old record, but the industry almost doubled its loan production from 2000. Refis outstripped purchase money loans 56% to 44%, ...
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£5 fee scrapped for IFAs
4 Mar 2002
Unpopular rules that stop IFAs earning more than £5 on many advice sessions are set to be abolished under forthcoming mortgage regulation - but not for non IFAs. The £5 maximum currently applies to all brokerage that does not lead to the signing of a mortgage contract. In finding that a larger fee may be justified in cases where the "appropriate advice would be for a potential borrower not to take out a mortgage", the Treasury consultation echoes ...
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Awards for First Independent
6 Mar 2002
First Independent Direct has won the FST Financial Sector Technology Awards 2002 for Best Use of New Media in Customer Facing Environments, beating Alliance & Leicester, Egg.com and Royal SunAlliance. First Independent Direct also won the award for Best Use of Contact Centres beating Bupa, Cornhill Insurance and Royal Bank of Scotland.
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BoE figures show consumer debt on the increase
6 Mar 2002
The latest figures from the Bank of England show that net consumer debt rocketed to £2.7 billion in December 2001 - the fastest rate of monthly growth since this statistic was introduced in April 1993. Industry pundits say the size of the increase makes a rise in interest rates more likely. Peter Forsey, partner in BKR Haines Watts business recovery and insolvency office, says: "We knew that spending in the run up to Christmas and in the sales that followed ...
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Boost for mortgage club membership
6 Mar 2002
Genesis Approved, the mortgage club run by correspondent lender Genesis Home Loans, has grown its membership to include over 130 intermediaries. Frank Thurlby, who heads up Genesis Approved, says: "It was our stated aim to reach a membership of 200 by the end of the first quarter of this year and we are well on the way to meeting that target." Genesis Approved needs to establish comprehensive intermediary coverage of England and Wales before its lead generation ...
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Britannic Money marketing head joins agency
5 Mar 2002
Matt Smith, former head of marketing at Britannic Money, has left the company after three years to join WPB Creative Ltd, a marketing agency, as business development director. Smith took up the post this month. Smith was responsible for the marketing launch of Britannic Money, including its successful sponsorship of Channel 4's Frasier, and the award winning partnership with fashion designer Russell Sage. WPB Creative was formed in 1995 and has quickly established ...
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Buy-to-let boom continues
6 Mar 2002
Latest CML figures show that buy-to-let is still growing strong. More than 41,000 loans were taken out in the second half of last year, taking the total number of outstanding mortgages to 184,900. New lending of £4.1 billion brought the overall value of loans to £14.7 billion, up from £11.3 billion six months earlier. The CML figures, based on returns from the 30 lenders responsible for 90% of buy-to-let loans, show that the average LTV ...
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Charcol cautions short-sighted investors
7 Mar 2002
Borrowers might be on the ball when it comes to remortgaging to cheaper rates, but Charcol has urged savers to rethink their savings attitudes after its research showed that 72% of ISA investors lack a long-term perspective towards their investment. Candice Hodgson of Charcol syas: "It is worrying to see that so few ISA investors are taking a long-term view. Stockmarket investment isn't a short-term sport, and whilst the volatility of last year will have unsettled some investors, ...
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Charcol courts first-timers
7 Mar 2002
Charcol has launched an exclusive one-year fixed rate at 4.49%, followed by a lifetime stepped discount. After the fixed period, the loan reverts to a discount of 0.75% below the SVR, currently 5.95%, for two further years, and then a 0.5% discount for the remaining term of the loan. Redemption penalties only apply during the first two years of the deal. The deal also offers free valuation and £200 cashback, and is squarely aimied at first-time buyers. Ray ...
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CII and SOFA call for 'transparent' qualifications regime
6 Mar 2002
The Chartered Insurance Institute and Society of Financial Advisers have issued a generally positive response to the FSA's consultation on a single framework of qualifications for the financial services industry. The FSA describes a single, coherent qualifications framework as "essential" if it is to meet objectives of enhancing consumer protection and awareness, and maintaining market confidence. In its response to the FSA's Examination Review, the CII and SOFA stress ...
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Clarification on securitisation issues welcomed
4 Mar 2002
Lenders who use securitisation as a source of funding have welcomed government clarification of regulatory responsibility when an equitable interest in a mortgage portfolio is sold to a special purpose vehicle.The Treasury’ mortgage regulation consultation paper explains the approach, following feedback on a previous consultation in October 2000.The main aim is to avoid the regulatory responsibility for regulation ever falling on an SPV, which raises finance ...
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Clarification welcomed by securitisation sector
4 Mar 2002
Lenders who use securitisation as a source of funding have welcomed government clarification of regulatory responsibility when an equitable interest in a mortgage portfolio is sold to a special purpose vehicle. The Treasury's mortgage regulation consultation paper explains the approach, following feedback on a previous consultation in October 2000. The main aim is to avoid the regulatory responsibility for regulation ever falling on an SPV, which raises finance to pay for the ...
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Correspondent case study: Mortgages PLC
4 Mar 2002
"Like most specialist lenders, Mortgages PLC is active in the correspondent-lending market. We have set up relationships with packagers and lenders on a full correspondent-lending and a branded-lending basis. Correspondent lending enables us to generate significant volumes of good-quality business from one source. However, with the forthcoming developments in regulation, every lender dealing in correspondent lending will see some changes in the structure. "Mortgages PLC has developed ...
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Cost of regulation to run into the millions
4 Mar 2002
Statutory regulation of mortgages will cost the mortgage industry tens of millions of pounds a year, on top of one-off costs estimated at £36m. However, the Treasury insists the price of regulation will not be allowed to stifle competition and points out that voluntary payments under the Mortgage Code would raise regulatory costs "regardless of the decision to give FSA powers to regulate". The Treasury also flags the FSA's commitment to take costs incurred by firms and consumers ...
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Crown helps homeowners protect their assets
5 Mar 2002
Considerable increases in home prices means that inheritance tax has become a more immediate problem for many people in the UK. But Crown Equity Release has a solution that helps homeowners over 60 reduce or eliminate their IHT liability and/or increase their incomes. By releasing capital from their property homeowners can both substantially reduce the potential inheritance tax liability on their largest asset - the family home - and use the released capital ...
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DIY shy nation
7 Mar 2002
Only half the homes purchased 20 years ago have been given a proper DIY makeover, according to a NatWest Mortgage Services survey. Homeowners in Yorkshire, Lancashire and the Midlands are particularly slow to do the place up, and are beaten hands down by the North East, where one third of people create their dream home in under three years. Contrary to popular myth, men and women are equally likely to lead the renovations. The NatWest survey also reveals that putting ...
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Enjoy a richer retirement with a CAM
8 Mar 2002
Yorkshire Bank has used the current concern over pensions to urge homeowners to boost the potential of their retirement funds by switching to one of its all-in-one current account mortgages. The Bank claims that swapping to its current account mortgage can save homeowners thousands of pounds in interest and shave years off their mortgage term - allowing them to focus their finances fully on funding their retirement from a much earlier age. According to the bank's ...
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Estate agents likely to favour IFAs
4 Mar 2002
Smaller estate agents are likely to recommend the services of IFAs if it keeps them out of the regulatory loop. Industry pundits say there is little incentive for independent outfits to seek FSA authorisation to arrange mortgages. The Treasury proposes that such registration becomes compulsory for estate agents introducing clients to "a tied agent of a particular lender" but is unnecessary for agents who "simply refer a potential borrower to an independent adviser authorised by the FSA". Hugh ..
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Euro loophole for net loans
4 Mar 2002
Sun Bank last week warned that a loophole in the Treasury's mortgage regulation consultation paper may mean that mortgages completed on the internet could fall short of British industry standards. Chris Cummings, marketing director at Sun Bank, says: "A potential loophole comes in the form of offshore advice. The Treasury is proposing that mortgages provided over the internet by a firm in another EEA state will be excluded from the regulations. This seems to fall short of the standards ...
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February success for Genesis Home Loans
6 Mar 2002
Correspondent lender Genesis Home Loans has announced a record month for new business during February. Marketing director Graham Warburton says: "February was an excellent new business month as we not only exceeded our previous total new business record but also smashed our own Genesis brand mortgage lending record." Genesis Home Loans has grown fast during the past 12 months. Nigel Gardner, who heads up the correspondent lending operation, says: "Unlike other ...
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Fiver rule for IFAs abolished
4 Mar 2002
Unpopular rules that stop IFAs earning more than £5 on many advice sessions are set to be abolished under forthcoming mortgage regulation - but not for non-IFAs. The £5 maximum currently applies to all brokerage that does not lead to the signing of a mortgage contract. In finding that a larger fee may be justified in cases where the "appropriate advice would be for a potential borrower not to take out a mortgage", the Treasury consultation echoes the long-held views of ...
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From our mortgage correspondent
4 Mar 2002
There is a gradual blurring of the dividing line between intermediaries and lenders as an increasing number of intermediaries are presenting themselves to clients as lenders. We have already witnessed the rise of the packaging industry, with some intermediaries specialising in the packaging of mortgage loans for other intermediaries and providing a valuable service to lenders. However, the scene is set to change yet again. The UK appears to be following the pattern ...
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FSA faces some hard definitions over 'advice'
4 Mar 2002
The Treasury's latest consultation gives the clearest indication yet of what aspects of mortgage advice are up for regulation, but industry figures say the debate on the true weakpoints in the lending process has only just started. On the subject of advice, the Treasury is reasonably clear: "Information or general guidance is not advice. The intention is to regulate only the giving of advice on the merits of taking out a particular mortgage." So advising ...
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FSA faces some hard definitions over 'advice'
4 Mar 2002
The Treasury's latest consultation gives the clearest indication yet of what aspects of mortgage advice are up for regulation, but industry figures say the debate on the true weakpoints in the lending process has only just started. On the subject of advice, the Treasury is reasonably clear: "Information or general guidance is not advice. The intention is to regulate only the giving of advice on the merits of taking out a particular mortgage." So advising someone to get a mortgage ...
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GMAC-RFC announces record results for 2001
7 Mar 2002
GMAC-RFC has announced record mortgage lending figures for 2001 of £1.8 billion for 2001. The company has seen its new lending figures quadruple over the last two years. It is still strengthening its position in the UK mortgage-backed securities market and has to date securitised in excess of £2 billion of mortgage assets. GMAC-RFC has completed eight issuances, its largest being £825 million in September 2001. Its most recent ...
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Government flushes sewer worries away
7 Mar 2002
Environment minister Michael Meacher has announced new bulding regulations that should spare the owners of new properties the expense and inconvenience of repairs to their sewers and drains. From 1 April all new sewers must be built to one agreed standard, so that householders can have their sewers adopted by sewerage companies without worrying about the expense of their future upkeep. By building all new sewers to one agreed standard, householders can be sure their sewers ...
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Government recognises generic mortgage advice
4 Mar 2002
The Law Society has welcomed government recognition that certain professionals are qualified to give clients generic mortgage advice as part of their service. The Treasury's mortgage regulation consultation paper explains that part of the Financial Services and Markets Act allows members of professional bodies designated by the government to carry out regulated activities, provided these are "incidental to the provision of professional services". These bodies include the Law Society ...
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Halifax refund 10,000 borrowers
5 Mar 2002
The Halifax is today refunding some 10,000 borrowers who requested a transfer to the bank's lower variable rate before 31st January 2002. The move follows a briefing note from the Financial Ombudsman Service yesterday about Mr and Mrs Wright, Halifax capped mortgage customers. The Ombudsman said its ruling only applies to borrowers with a capped or discounted mortgage and who had asked to be transferred to the lower variable rate during the period when it was available ...
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Halifax under fire from Consumers' Association
6 Mar 2002
The Consumers' Association has condemned the Halifax's refusal to compensate mortgage borrowers on the higher of its dual variable rates as "pitiful". The CA spoke out after the Halifax put itself on a collision course with the Financial Services Ombudsman by ruling out compensation to thousands of borrowers. The CA says: "This is a pitiful response from the Halifax. We are really concerned for consumers who joined the Halifax thinking they would get a fair deal." ...
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House prices still on the up
8 Mar 2002
The latest Halifax house price index shows a seasonally adjusted increase of 1.5% in February. This is the fourth successive strong increase since October 2001 and takes the annual rate of house price inflation to 16.9%. Halifax attributes the price rise to a bounce back in confidence from the lows seen in the aftermath of September 11 and continued supply shortages in the market. Gary Styles, Halifax head of group economics, says: "The housing market has started ...
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How to buy-to-let without making a purchase
6 Mar 2002
Buy-to-let has taken a corporate direction with the launch of five property investment funds by Andrew Reeves Property Ventures. The funds are aimed at would-be investors who prefer to keep the business of property purchase and managing tenants at arm's length. Each of the funds will be capitalised at £1.5 million and be geared to £2.5 million in mortgage lending, to produce a £4 million fund for investment in residential property in greater London. ...
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IFonline sponsors mortgage regulation seminar
6 Mar 2002
IFonline is to sponsor the CML mortgage regulation seminar that takes place on March 15th at the Victoria Park Plaza. The event will provide in-depth analysis about existing and potential regulation issues for the mortgage market, varying from FSA responsibilities to the impact upon the mortgage code. Martin Finegold, chief executive of IFonline says: "We are very excited at our involvement with this important event. It is an opportunity to raise the industry's awareness ...
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Industry welcomes Treasury plans
4 Mar 2002
The decision to regulate advice was broadly encouraged by lenders and the latest consultation document from the Treasury has been welcomed. James Mayne, business planning manager for Britannic Money, says: "In every response to consultation that I saw there were comments that regulation would not work without regulating intermediaries. As a lender we don't have any complaints with this situation. People have asked for this and the question now is whether people are prepared for ...
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Intermediary response
4 Mar 2002
Campbell, an accountant, and his wife Susan, a part-time administrative assistant, are both 38 years old. They have two children, aged 15 and 13. They have lived in their five-bedroom detached house for 13 years and have paid off about 30% of their mortgage. They would like to send their children to private schools to prepare them for university, but are worried they may have to sell their house to raise the funds. What can they do? Intermediary response Campbell and Susan's ...
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It's time to have your say on advice
4 Mar 2002
The Treasury last week issued its latest consultation document on regulating mortgages - a precursor to giving the Financial Services Authority responsibility for regulating the selling of residential mortgages, including the advice associated with the sales process. The Treasury has consulted twice before on mortgage regulation, in July 1999 and October 2000. Under those consultations, the Treasury proposed that the FSA regulate in a way that focussed on transparency of mortgage terms. ...
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Landlord yields fall again
8 Mar 2002
Yields for landlords in the residential lettings sector fell for the fifth consecutive quarter, according to the latest Royal Institution of Chartered Surveyors (RICS) survey of the UK residential lettings market. A big increase in the number of investors entering the buy-to-let market, static rents and a slowdown in demand have combined to reduce income returns for landlords. Demand for corporate lets in London, which account for 30% of the market, was markedly down, ...
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Lender Response
4 Mar 2002
Lender response A temporary shortage of funds shouldn't force Campbell and Susan to sell their family home. Their property is an asset they can use to meet other financial commitments. One option for the family would be to remortgage their home to free up some of the equity stored in the house. Since they have paid off 30% of their mortgage and their house will most likely have risen in value since they purchased it more than a decade ago, the sum they could raise is likely to be ...
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Mortgage exhibition set for November
4 Mar 2002
November will see the launch of the Mortgage Business Show. Next to the Mortgage Strategy forum and awards on 16 May 2002, the event is expected to be the highlight of the mortgage calendar. The event will feature exhibitors from the industry's leading lenders and packagers and a programme of seminars and workshops to help residential mortgage brokers improve their businesses. The two-day event will be run by Clarion Events, the event management ...
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Mortgage exhibition set for November
4 Mar 2002
November will see the launch of the Mortgage Business Show. Next to the Mortgage Strategy forum and awards on 16 May 2002, the event is expected to be the highlight of the mortgage calendar. The event will feature exhibitors from the industry's leading lenders and packagers and a programme of seminars and workshops to help residential mortgage brokers improve their businesses. The two-day event will be run by Clarion Events, the event management arm of the Earls Court Olympia ...
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Mortgage Express launches online applications
4 Mar 2002
Mortgage Express has become the latest lender to put mortgage applications on the web. The MX-Online system offers online quotations and automated decisions-in-principle alongside real-time case tracking. It is now fully available, following a year-long pilot that involved 500 brokers, and sees electronic applications account for 10% of Mortgage Express business. The longer-term target is around 50%. In restricting some deals to the internet, Mortgage Express has followed the likes ...
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Mortgage Express offers Clean Slate
6 Mar 2002
Mortgage Express will reward customers who have overcome credit problems with a new mortgage launch on Monday 11th March 2002. The Clean Slate offers the opportunity to borrow up to 90% of the property's value MIG-free, transparent pricing linked to the Bank of England Base Rate, and flexible payments where the customer can overpay, underpay, take a payment holiday or take the cash. It is available to all customers who can provide a clean 12-month credit history. David ...
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mortgageforce spends £2.3m to lure DBS firms
5 Mar 2002
National mortgage franchising operation mortgageforce is spending £2.3m in "golden handshakes" to head off other networks and packagers in the pursuit to recruit member firms left high and dry by DBS's closure of its mortgage packaging operation. mortgageforce - headed by managing director Robert Clifford - is based in Nottingham and already claims that it was the UK's fastest growing franchise in 2001. So far mortgageforce has earmarked 125 regional ...
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My Mortgage Week - Jeremy Duncombe
8 Mar 2002
Monday: Awake at 8am so wander off to breakfast in my shorts and T-shirt. The chef produces his usual excellent pancake, over which I drizzle a little syrup. Back to the beach for a final few minutes of sun and sea, before a shower and then a boat to the airport. Not a typical day at Platform Home Loans but the last day of our holiday in the Maldives. The flight is around 11 hours and is spent with my wife Carole and I trying to entertain our six- year-old ...
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Networks to benefit from 'appointed representatives' proposal
4 Mar 2002
Individual advisers and small IFA firms could be pushed towards larger networks, under provisions of the Treasury's mortgage regulation consultation paper. Section 39 of the Financial Services and Markets Act permits "appointed representatives" to work for FSA-authorised individuals or organisations - which may be a lifeline for sole traders and small adviser firms. Eddie Smith, director of business development at Verso, says: "The provision for 'appointed representatives' ...
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Networks to benefit from proposals
4 Mar 2002
Individual advisers and small IFA firms could be pushed towards larger networks under provisions of the Treasury's mortgage regulation consultation paper. Section 39 of the Financial Services and Markets Act permits "appointed representatives" to work for FSA-authorised individuals or organisations - which may be a lifeline for sole traders and small adviser firms. Eddie Smith, director of business development at Verso, says: "The provision for 'appointed representatives' ...
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New ASU policy helps tenants pay the rent
6 Mar 2002
CETA has launched an income protection product that will pay a tenant's rent in case of accident, sickness or unemployment. Traditionally, ASU policies have been linked to mortgage sales. CETA introduced its new Safeguard Income Protection policy in response to a growing buy-to-let sector and an increase in the number of people in rented accommodation. In the event of a tenant being involved in an accident, becoming ill, losing their job or being hospitalised, policyholders ...
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New leaflet to raise training awareness
4 Mar 2002
A revised copy of the Mortgage Code leaflet You and Your Mortgage is to be issued to borrowers in a bid to raise consumer awareness of the December training deadline. Among the new provisions listed in the single-sheet leaflet is the assurance that "lenders and intermediaries will make sure that their staff are appropriately trained, qualified, experienced and supervised". Under FSA guidelines, all mortgage advisers are required to be CeMAP or MAQ-qualified by 31 December 2002 to be ...
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New pilot planned for HCR
4 Mar 2002
An updated Home Condition Report (HCR) will be piloted across the UK later this year. It will be tested alone across unspecified locations in London, the Midlands and the North. The final scope of the pilot will be decided when the current consultation on the HCR is complete. The DTLR has carried out some informal testing of the HCR in its current form and sources close to the project expect to see a tweaking of the design rather than a radical reshape. Government sources confirm ...
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Newcastle predicts buoyant housing market for 2002
5 Mar 2002
Newcastle Building Society's gross lending rose by 36% to all-time record of £496 million last year. Lending to London and South East housing associations for social housing projects quadrupled to an unprecedented £76.5 million (2000: £19 million) and market share for net new mortgage lending was 120% of natural market share. Robert Hollinshead, Chief Executive of Newcastle Building Society, says: "Our record year of achievement leads us to look forward ...
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No change in interest rates
8 Mar 2002
The Bank of England's monetary policy committee has voted to freeze interest rates at 4%. The decision comes as no surprise to analysts who believe rates will go up later this year to combat rising levels of household debt and in response to stronger than expected growth around the world. Ray Boulger of Charcol says: "This is the fourth rate freeze in a row and we expect little or no change in Base Rate for several more months yet. Historically low interest rates ...
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Packager OPM offer £1000 bonus
5 Mar 2002
Packager OPM has appointed GMAC to its panel and is offering £1000 marketing allownace for every five cases completed within a three-month period. This is payable over and above the current 1% already payable on GMAC adverse products. Contact: 01905 641404
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Packagers unable to do direct business
4 Mar 2002
Packagers may have to drop direct channels or register them separately under the Treasury's consultation paper on mortgage regulation. John Prust, sales and marketing director at SPML, told Mortgage Strategy: "Those packagers who also have an 'adviser' arm will need to take steps to separate these two functions to effectively comply with the regulation requirements. This should put a lot more clarity around what is a packager fee and what is a procuration fee - a matter that ...
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Record number of mortgage advisers register for exams
5 Mar 2002
The Mortgage Code Compliance Board says that 69,000 mortgage advisers have now registered to take one of the accredited professional mortgage qualification. Under the Board's Fitness and Competence requirements, by 31 December 2002 any adviser providing mortgage advice and a recommendation must have completed either the Certificate in Mortgage Advice and Practice or the Mortgage Advice Qualification (MAQ). Under the Board's Registration Rules, those failing to ...
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Regulation Q & A
4 Mar 2002
Q. What would have happened if CP98 had gone ahead? A. Mortgage pundits breathed a sigh of relief when the FSA announced its decision in December 2001 to review the implementation of CP98. The regulation had already raised several concerns, including worries about the additional costs implied by CP98 and even possible loss of business. Technology would have been the most obvious answer to concerns about CP98 - to cut costs, save paperwork and improve efficiency. But surprisingly, ...
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Remortgage boost for law firm
7 Mar 2002
The boom in remortgaging has been confirmed by law firm Halliwell Landau, which has broken through the billion pound barrier in terms of the total value of remortgage applications handled in the last 12 months. Mortgage repossession and shortfall are two less welcome areas that have contributed to Halliwell Landau's recent growth, which has seen the firm expand its Financial Institutions Group from 10 to over 100 people in less than two years. The firm has now created ...
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Skipton takes new steps
6 Mar 2002
Skipton Building Society has launched a four-year stepped discount mortgage, which offers discounts of up to 2.3% in the first year. Current pay rates start from 3.4%. Skipton's variable rate is now 5.7%. The mortgage has four pay rate options. Borrowers seeking up to 85% LTV qualify for a 2.3% discount in the first year, and 1.15% in year two if they take insurance. Without insurance they get a 2.15% first year discount and 1% in year two. On loans of up to 95% LTV Skipton ...
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Speedier valuations for the south east
8 Mar 2002
Private Finance has promised buyers in the south east a next-day valuation service to speed up mortgage offers to secure the desired property. The company made the offer after signing a deal with an independent residential property valuer, which Private Finance refuses to name but describes as "one of the country's biggest". There is an extra charge for the 24-hour valuation service, but Private Finance says it will be worth a borrower's while to pay up rather ...
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Standard Life launch CD Rom
7 Mar 2002
Mortgage introducers are now able to slip Standard Life Bank into their disk drive, thanks to a dedicated CD Rom that promises to make the business of completing client information checklists and applying for business on line easier. The pocket-sized mini CD Rom contains all the information introducers need to write business and should enable introducers to save time. David Macmillan, director of sales and marketing at Standard Life Bank, says:"Standard Life Bank continually ...
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Sun Bank asks Treasury for consultation detail
9 Mar 2002
Sun Bank has sought clarification of Treasury proposals for FSA regulation. Particularly, it wants to know what regulation will mean for so-called mortgage variation, where advice is given to borrowers within their existing deal. Sun Bank wants to know if a lender should automatically offer fresh mortgage advice when a customer comes off a fixed rate, and whether this advice should come from the original introducer or the lender. Sun Bank also says there is potentially ...
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Sun Bank takes buy-to-let offshore
6 Mar 2002
Sun Bank is giving expatriates, offshore companies and foreign nationals a chance to enter the profitable UK buy-to-let market with a new range of mortgages. Two-year fixed rates are available from 4.99%, with discounted rates from 4.34%. The range includes buy-to-let products for beginners, for limited companies based in the UK and offshore, for foreign nationals and for experienced landlords looking to manage a portfolio. There is also a let-to-buy option for those ...
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Sun Bank warn of loophole in Treasury consultation
4 Mar 2002
Sun Bank last week warned that a loophole in the Treasury's mortgage regulation consultation paper may mean that mortgages completed on the internet could fall short of British industry standards. Chris Cummings, marketing director at Sun Bank, says: "A potential loophole comes in the form of offshore advice. The Treasury isproposing that mortgages provided over the internet by a firm in another EEA state will be excluded from the regulations. This reliance on a fellow regulator ...
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The history of correspondent lending in the UK
4 Mar 2002
The concept of correspondent lending is not new. As far back as 1986 Mortgage Trust, the centralised lender that became Britannic Money, was acting as an originating mortgage lender for a number of Scandinavian banks that included the Danish bank Privaatbanken. Mortgage Trust issued offers to customers in its name, acting on behalf of Privaatbanken. Privaatbanken wanted to hold UK mortgage assets but did not have the infrastructure in the UK to undertake the origination or administration ...
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The Sun always shines on specialist lending
4 Mar 2002
Sun Bank is now a wholly owned subsidiary of the Portman Building Society, which acquired it in November 2001 for £95m. It is trying to establish itself as the market-leading specialist lender and has been trading as a bank since 1989. More than 200 Sun Bank staff work at the Icon development in Stevenage, Hertfordshire (pictured above), which has been the company's head office since November 2000. Q: How is Sun Bank structured? A: Sun Bank is a wholly owned subsidiary ...
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The time to respond to consultation is now
4 Mar 2002
And so it begins. The Treasury last week published the first round in a series of consultation papers that will establish how the FSA is to regulate the selling of mortgages and the advice process that goes with it. As we report over seven pages in this issue of Mortgage Strategy, although the first consultation document has been largely welcomed, it has already raised issues of concern. The Treasury says that firms or people engaged in advising on or arranging aspects of a regulated ...
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This week's problem case
4 Mar 2002
Campbell, an accountant, and his wife Susan, a part time administrative assistant, are both 38 years old. They have two children aged 15 and 13. They have lived in their five- bedroomed detached house for 13 years and have paid off about 30% of their mortgage. They would like to send their children to private schools to prepare them for university, but are worried they may have to sell their house to raise the funds. What can they do?
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This week's problem case
4 Mar 2002
Campbell, an accountant, and his wife Susan, a part time administrative assistant, are both 38 years old. They have two children aged 15 and 13. They have lived in their five- bedroomed detached house for 13 years and have paid off about 30% of their mortgage. They would like to send their children to private schools to prepare them for university, but are worried they may have to sell their house to raise the funds. What can they do?
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Tough going for first time buyers
8 Mar 2002
New research from the Halifax shows there are significantly fewer first time buyers around than during the late 1980s housing boom, and that their average age has increased. The research uncovers differences in FTB affordibility across UK regions. First time househunters find the going particularly tough in London and the south generally. The north is the most affordable area in the country. A total of 568,000 FTBs entered the housing market in 2001. This is ...
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Training flipchart blunder humiliates Halifax
4 Mar 2002
Cabbies, new business start-ups, window cleaners, market traders and shopkeepers are amongst business clients that the Halifax "do not want". The bank, which last week announced annual profits of £3bn, has been humiliated after a flipchart used for training spelled out the customers that the lending giant will not do business with, namely "new business start-ups, businesses that deal in coinage, taxi drivers, window cleaners, market traders, shops and supermarkets". The gaffe ...
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Training Q & A
4 Mar 2002
Q. My client wants a CAT-standard mortgage. I have considered her circumstances and have recommended that she takes out a fixed rate mortgage. I am considering four different fixed rate products (see below). In each case, the lender will require a mortgage indemnity guarantee to be effected. Can you tell me which of the four would meet the criteria on charges to qualify as a CAT-standard mortgage? A. CAT-standard mortgages were introduced as an option for applicants who wish to have ...
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Treasury publishes regulation paper
4 Mar 2002
Ruth Kelly, economic secretary to the Treasury, last week set out proposals to provide the framework for the Financial Services Authority to regulate mortgage advice. The steps required to implement the new regulatory regime include amendments to the Regulated Activities Order and the Financial Promotion Order. The first will specify activities of arranging and advising in relation to regulated mortgage contracts. The latter will bring communications promoting the services of intermediaries ...
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Unsecured loans outside regulation
4 Mar 2002
The Treasury says that unsecured loans, as well as loans that are on second charges on property and currently regulated under the Consumer Credit Act, will continue as normal. It says earlier feedback suggested that firms operating in this market wanted to avoid dual regulation as much as possible. A spokesman says: "It was clear that it would be desireable for mortgages not to be treated as regulated consumer credit agreements under the CCA when lending under ...
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US case study: E-LOAN Inc
4 Mar 2002
More than 36% of loans originated in the US use some form of correspondent-lending programme. E-LOAN (www.eloan.com) is a leading online lending company that offers consumer mortgage loans and debt management services. E-LOAN is quoted on the Nasdaq as EELN. It has reinvented the consumer loan process by offering a broad choice of products from many lenders. However, a large percentage of the loans are completed by E-LOAN and then sold on under correspondent or through-lending programmes. It ...
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Variations should not be an enigma
4 Mar 2002
The Treasury's mortgage regulation consultation paper details the sort of variations to a mortgage that may have implications for borrowers by altering the original terms of the deal. These include changes to the repayment method, changes to the type of mortgage, the addition or removal of a borrower, the capitalisation of arrears or other charges, an increase in the loan amount and a variation in the duration of the loan. Mike Fitzgerald, sales director of Brentwood-based IFA ...
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Which of these four products is CAT standard?
4 Mar 2002
Product A Maximum booking fee is £150 Borrower pays no fee to broker Maximum redemption charge is 1.5% of the amount owing for each remaining year of the fixed period Product B Interest calculated daily No separate charge for the mortgage indemnity guarantee Maximum booking fee is £200 Product C Interest calculated daily Maximum redemption charge of 0.5% if the borrower stays with the same mortgage lender when they move home No redemption ...
