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All I want for xmas…

…is more help for first-time borrowers, greater clarity on Home Information Packs and market transparency. Not your typical Christmas wishlists, but these are among the things key players in the market are wishing for, says Mortgage Strategy…is more help for first-time borrowers, greater clarity on Home Information Packs and market transparency. Not your typical Christmas wishlists, but these are among the things key players in the market are wishing for, says Mortgage Strategy

With Christmas under a week away, the majority of us have fired off our letters to Santa and hung our stockings expectantly from the fireplace.

But while the latest gadgets and more socks from Marks & Spencer are all well and good, what if you could draw up a list of things you would like to happen in the mortgage industry in 2006?

Mortgage Strategy did just that and rounded up six of the market’s most renowned figures to see what they would ask for.

Mark Harris, managing director of Savills Private Finance, suggests the most welcome development for 2006 would be a further reduction in the base rate to stimulate market growth. He also suggests ideas for helping a particular subsection of borrowers – first-time buyers.

“I want more assistance for first-time buyers, including innovations from lenders, and a workable expansion of the shared equity scheme,” he says. “Abolishing Stamp Duty altogether for first-time buyers is another way of helping this section of potential owners. Increasing the threshold would help, but allowing first-time buyers to benefit, whatever level they enter the market, could be more workable.”

Harris would also like to see a warning on the front of Home Information Packs. “This would prevent first-time buyers from being fooled into thinking they have to take the mortgage, legal or survey recommended by the HIP provider, and to let them know they are free to shop around,” he adds.

Harris is looking forward to the arrival of new lenders in 2006 and the subsequent increased choice for borrowers. He believes this should result in more aggressive pricing and competition. He would also like to see more of his contemporaries be truthful with their sales figures.

“More transparency and honesty from intermediaries regarding the level of business they claim to be writing would help companies set more achievable targets,” he says.

The last improvement Harris wants for 2006 is better remuneration terms from lenders, as the role of intermediaries becomes increasingly important in terms of the advice given and the amount of paperwork that has to be processed. “It would be a positive step if this extra effort was acknowledged,” Harris says.

Chris Cummings, director-general of the Association of Mortgage Intermediaries, says top of his Christmas list is the happiness of the Mortgage Strategy team and those they are close to, followed closely by a profitable year for all in 2006. But the latter wish is Wnot as generous as it first seems. “If 2006 is a good year for business, it will hopefully mean AMI members will pay our fees,” he says.

Turning to serious mortgage matters, Cummings believes there should be a regulatory system that rewards compliant companies at a reasonable cost. “I would like a regulatory system that delivers cost reductions for well-managed companies that present a lower regulatory risk and so deserve a reward,” he explains.

“I would also like a complaint-free new year for all AMI members, and I hope lenders choose to ditch the data protection excuse for refusing to share borrower details.

“They were our customers before they became their borrowers.”

Next on Cummings’ list is improved lender service standards. “Scrapping premium rate telephone numbers and producing clearer literature would be a good start,” he suggests.

Another of his wishes for Christmas is a code of conduct for lead generation firms to sign up to while they remain outside the jurisdiction of the Financial Services Authority.

The AMI boss would like there to be fewer consultation papers to respond to, particularly from Europe. His final wish is that the whole of the AMI team enjoy their jobs in the New Year even more than they already do.

“Regulation is the new rock and roll,” Cummings says optimistically.

At the top of his wishlist, Guy Batchelor, sales and marketing director of Platforms, wants greater clarity regarding Home Information Packs and an extension of their implementation to October 2007.

“I’m not sure if it is realistic to train 8,000 home inspectors by June 2007, and it is not clear if estate agents providing HIPs will be regulated,” he says.

“A detailed timetable is needed so the industry and consumers know when changes will affect them.”

As well as the continued stability of house prices, Batchelor says more improvements need to be made to sourcing systems to help intermediaries trace sub-prime products.

“Some systems show every product available for a client, even ones they wouldn’t consider, which can lead to confusion,” he says. “Exclusives mean there is a huge amount of product duplication, so giving intermediaries the choice to show all products, exclusives only or core range only could help.”

Batchelor also hopes for a smooth A-Day transition and more investigation into common standards in the mortgage marketplace.

“Intermediaries use different points-of-sale and compliance systems, and it would be costly in terms of time and money for lenders to individually integrate their own online systems to these,” he says.

“A common trading platform would only need to integrate once and then give an electronic trading capability with lots of lenders immediately.”

The Platform sales supremo would like the government and industry to work together to revitalise the first-time buyer market, with mystery shopping exercises by the Financial Service Authority during the year to ensure advisers and lenders are complying with the regulatory regime.

Greater use and provision of online technology by intermediaries and lenders is also important to Batchelor. This should improve processing times and reduce the requirements for paperwork, he says.

Batchelor’s final wish is a review of the Mortgage Conduct of Business.

“While small amendments have been made in the last year, there are significant areas, such as the role of packagers and the division of responsibilities between lenders and intermediaries, where rules and guidance are missing,” he says.

James Rodea, commercial director at Cluttons Private Finance, wants a higher calibre of job applicants.

“Recruitment was the most difficult challenge I had last year, as the quality of the people I met was low,” he says. “We have a good proposition and I am finding it hard to find the right people.”

Rodea also wants a steady market, good transaction levels and increasing consumer confidence within a certain level. “We do not want too much confidence or house prices will spiral out of control. A boom and bust cycle does nobody any good,” he says.

Rodea says it cannot be much longer before the majority of lenders think about paying trail commission. He adds that it is important for there to be consumer and market realisation on fees.

“When will we realise that we are all professionals and should feel comfortable charging a fee for the service we provide? We are worth it,” he says.

Rodea believes Key Facts Illustrations are too long and wants lenders to talk to advisers to see how much easier they could make the life of intermediaries with regards to technology.

“I am dreaming of the day we can key an application onto a platform provided by our customer relationship management system and then press a button to send it to any lender we choose,” he says.

Ray Boulger, senior technical manager at John Charcol, hopes increased activity in the property market in the last six months will continue throughout next year. He anticipates gross lending for 2006 will reach 291bn, and says it’s a case of more the merrier when it comes to welcoming new lenders into the market.

Boulger would also like to see more lenders follow The Woolwich’s lead on retention and broker work, by offering new business rates to existing customers and a proc fee to brokers.

On a regulatory note, he says the FSA and Department of Trade and Industry should agree on how to provide joined-up regulation, so that when an FSA-regulated intermediary advertises a product regulated by the Consumer Credit Act – such as buy-to-let mortgages – brokers don’t have to continue the farce of including two risk warnings to achieve compliance.

For example, he suggests that instead of saying “your home may be repossessed”, the risk warning for a buy-to-let mortgage should say something along the lines of “your property” or “someone else’s home may be re- possessed”.

And he adds that to avoid most financial promotions from being misleading, the current requirement to highlight the APR should be discontinued – except for lifetime fixed rates or trackers where it provides a helpful comparison. A meaningful way of calculating APR should be adopted to reflect how borrowers tend to change their mortgage terms or remortgage soon after their initial deal ends.

He believes all lenders should comply with the FSA’s requirement that they should not inhibit borrowers from shopping around.

Boulger goes on to highlight how exit fees have increased so much in the last two years that in many cases they are now another income stream for lenders and are increasingly used as a retention tool.

“These fees should be fixed at the amount stated in the KFI, unless the borrower switches to a new deal with the same lender, in which case the lender would have the option to reset the fee,” he says.

Boulger is also passionate about his desire for HIPs to be canned. “After the chancellor’s 11th-hour U-turn on SIPPs, there is still hope that the government will see sense and cancel HIPs as a compulsory requirement,” he says. “With e-commerce increasingly becoming part of the house-buying process, HIPs are yesterday’s solution to yesterday’s problem.”

And finally, Boulger would like to see the Italian Stallion trounce the Irish Rogue in the 2006 New York Marathon. “After losing by only 10 minutes last time round, rumours are beginning of a re-match in 2006. Walter Avrili has been training like a man possessed in his quest for revenge over Kevin Duffy,” he says.

Linda Will, managing director of Accord Mortgages, seeks increased recognition for her company in the New Year.

“Top of my wishlist this Christmas is to have people remember that Accord was the first lender to offer a 10-day offer turnaround, and not only for cases at 75% LTV or below,” she says. “It was also the first to publish its service standards and how well it performs in comparison with others.”

Next on her list is to see sourcing systems get Accord’s products right first time. “I know that is asking a lot but this is a wishlist,” Will adds.

She would also like to see no more regulatory changes for at least a year. “We need time to consolidate what we have, absorb principles like Treating Customers Fairly and prove to ourselves and our customers that this whole regime is adding value,” she says.

The Accord boss would also like not to hear the word “HIPs” for at least a week, and to get the lender’s cascade system up and running.

Away from her mortgage desires, Will also has a number of practical wishes. “A road angel safety camera warning device would be nice, as there are too many motorway miles and way too many cameras,” she says.

“While I’m on the subject, I don’t know why they are called safety cameras when all they do is cause a whole wave of cars to brake alarmingly and lead to a multiple pile-up.”

Her final wish is for Michael Bolton to complete his gardening leave. “Love him or loathe him, it is way too quiet without him,” she adds.


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