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Forget terrorist blacklists, it’s HMRC chasing revenue

Last week’s lead story warned mortgage brokers that they could be falling foul of the regulator by failing to check their clients against an HM Treasury blacklist.

Under Treasury legislation, a financial firm can commit a criminal offence by transacting with or providing advice to individuals with links to terrorism.

The Treasury publishes a blacklist of such individuals on its website against which firms are expected to check their client database as part of compliance with the Financial Services Authority’s financial crime requirements.

So terrorists have resorted to buying two-bedroom terraces on buy-to-let mortgages?

They can’t be that good as terrorists if they have to register on the electoral roll, take up credit facilities over a couple of years and then go house hunting in a flat market.

They would have to apply in their own name and prove with original documents who they are and then provide evidence of income and bank statements and a deposit. Then they have the hassle of contracting a lettings agent to find a suitable tenant.

This is just not realistic. It has nothing to do with terrorism. Why doesn’t the regulator just admit it’s all part of the HM Revenue & Customs’ campaign to maximise revenue? If there is a list of terrorists who are known to the authorities surely they would be locked up already, not house hunting?

I hate the fact that the broker community has been forced into becoming unpaid informers on behalf of HMRC. It should go catch its own tax dodgers and not expect brokers to do it for free. We should be able to bill HMRC up to 50% of any new revenues raised as a result of leads provided.

That’s an enterprising initiative. The first place to look would be the FTSE 100 friends of the government.


All this over-auditing just undermines the experienced surveyor

I can confirm that the government is having success with its job creation policies for the private sector.

My understanding of the plan was for public sector job cuts to be offset by private sector investment. Well, in the world of residential surveys and valuations it is certainly working.

A whole new industry has been created – let’s call it the over-audit. It works like this – I audit someone and they audit me.

So I will audit my job but just to make sure I did it correctly, you can audit my jobs too.

I screen my new starters but I get someone else to screen them too. I use Experian for my credit checks, but that isn’t acceptable for some lenders and I have to use their preferred firm.

And if you say your previous auditor told you that their preferred firm was best, you get back – “Well, our auditor is better than their auditor and we told the lender we were the best”.

Firms also have access to software that flags up unusual variances and we’re told not only that the software looks at it as well as the surveyor that sent the job, but the lender does as well. Is it a good thing to question someone’s professional judgment three times?

Unless I am mistaken it is exactly this bureaucratic nonsense that the government wanted to be removed from the public sector.

Thinking about it, the government appears to have successfully moved that mentality from public to private.

The above merry-go-round is producing a raft of new auditors in the valuation industry, all trying to make sure that the surveyors who have been doing this job for 30 years are not illegal aliens who have been money laundering in their spare time.

Just like when we were looking for Osama Bin Laden, I fear they are looking in the wrong place for these wrongdoers.

To Prime Minister David Cameron, I say your strategy is working. But I wish it wasn’t. The audit sledgehammer has well and truly set its sights on a new nut.

disillusioned surveying practice


FSA should take on state-owned banks first for dual pricing

I was glad to see that the regulator recently highlighted lenders’ dual pricing as an issue, but it has to be noted that one of the worst offenders is the Royal Bank of Scotland/NatWest.

As RBS is largely state-owned it would seem a good idea for the government and the FSA to stop it from dual pricing and set an example to the rest of the mortgage market.

The major frustration of being an independent broker is being undercut by the likes of HSBC, RBS and Yorkshire Building Society, to name but a few culprits.

The choice for consumers should be either to use a broker and get advice or to go direct to the lender and not get advice – not to go to the lender directly and get a better deal.

Whole-of-market advice should be valued and it should genuinely be independent.

Jason Simpson
Mortgage broker
Redmen Financial


Jupp is wrong to say lenders discriminate against self-employed

I concur with the sentiments of Brightstar Financial managing director Rob Jupp in his letter last week that lenders need to put some faith in the experience of human underwriters, but I don’t agree that most lenders discriminate against the self-employed.

The issue is affordability and lenders want to ensure that all borrowers, self-employed or otherwise, can afford to maintain their monthly mortgage payments.

I cannot speak for all lenders, but all that we ask for from self-employed clients is two years’ accounts, which I think is reasonable.

If they can afford their monthly repayments, we’re happy to lend.

If Jupp believes there is widespread exclusion of the self-employed by lenders, it would be good to see specific examples.

He is right to conclude that the self-employed are not bogeymen but rather a rich source of quality business – which is precisely why we and others are happy to lend to them.

Charles Haresnape
Managing director
Aldermore Residential Mortgages


Interest-only changes are nothing less than lender muscle-flexing

Lenders’ change of stance on interest-only seems to be another ploy to inject higher monthly payments into their coffers while continuing a no-lend policy.

Many people have interest-only deals so they can live in a house they love, at a price they can afford, which is cheaper than renting in a similar or less desirable area.

These enforced changes will only serve to help depress housing, increase repossessions and take away customer choices. Lenders want absolute control.

Ian Windsor-Smith


CML’s interest-only analysis ignores some crucial issues

I was interested to read last week that the Council of Mortgage Lenders thinks pronouncements from the Financial Services Authority that interest-only is a ticking time bomb have been exaggerated.

According to the CML, there are around 3.9 million outstanding interest-only mortgages. Of these, two-thirds will mature after 2020. In the meantime, the number of interest-only mortgages set to mature each year is between 131,000 and 158,000.

This compares with around 7.3 million capital and interest mortgages currently held by UK consumers.

I disagree with the CML as it doesn’t touch on the procedures lenders will now follow after amending their interest-only criteria.

In the past, lenders have helped interest-only borrowers who need more time to clear their debts. Will this still happen?

The CML also disregards the changes to interest-only lending policy which will cause havoc in the next few years. I don’t want my clients sleepwalking into problems in the future and will be warning them accordingly.

Stuart Gregory


Brokers should check files as a mortgage pay-off crisis looms

Advocates of interest-only seem to believe everyone should have such a mortgage and spend the excess money they have on a better life and not repaying debt.

This is the same policy as the last government, which was to run up £1trillion worth of debt in the hope of economic growth.

Lenders are now asking retiring customers how they will pay off their mortgages. For many, their reduced income means they must sell the home they love. Others will be repossessed and the media has no doubt reserved their front pages to decry these evil bankers.

A few will be able to afford their mortgage. From all groups there will be calls to claims management firms with complaints about the mortgage advice and pleas of ignorance on being told the risks.

Like endowments, the industry will have to pay out on all cases where the documentation is not 100% and many advisers will see their professional indemnity insurance companies subrogating the cost of the claims to them.

Considering that income multiples have been the same with most lenders for interest-only or repayment mortgages, the repayment method has rarely prevented borrowers from finding the home they love. It is more about whether they are prepared to sacrifice some luxuries.

I suggest all advisers review their files and ensure they are protected.

Aaron Bardoe


Spurious claims led to rise in complaints against businesses

The FSA last week revealed that the number of complaints about mortgage businesses, including brokers, almost doubled in the second half of 2011.

There were 52,746 complaints about mortgage businesses in the second half of 2011, up from 29,917 in the first half of the year. Some 47% of complaints – 25,687 – were upheld in favour of the consumer, compared with 45% in the first half of the year.

But we all know why complaints numbers have increased. Claims companies touting for business, that’s why. We have had a number of these at our firm and they have no foundation whatsoever. It’s simply clients trying it on, spurred on by claims firms badgering them.

William Kingsley Prize may vary from picture



MS Leader: FSA mustn’t waver on advice

Since the last Mortgage Market Review consultation paper in December there has been disquiet among lenders about the Financial Services Authority’s stance on advice.

Colin Sanders, Chief Executive Officer, Omni Capital

In the money

The Budget has put the spotlight on high net worth borrowers with changes to Stamp Duty, which have elicited a mixed reaction. Mainly concentrated in London, the sector remains the domain of a few specialist brokers and is predicated on strong relationships

A bull case for US equities?

Neptune video: a bull case for US equities?

Watch Felix Wintle, head of US equities at Neptune, discuss why he believes US equities are in a structural bull market and the key factors that can drive the S&P 500 higher.

In the video, Wintle addresses the following:

• The US market and why — despite equities rising from 2009 — he believes the structural bull market only started in 2013
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