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Bailout may not be enough to save PM

How many more redundancies will it take before Prime Minister Gordon Brown realises he needs to help the mortgage industry? The loss of 50-plus jobs at edeus last week is another hammer blow to the market and a sure sign, if one were needed, that the worst is yet to come.

As the details of the Bank of England’s £50bn rescue package to swap AAA-rated mortgage books for government bonds emerged at the beginning of last week, it was clear that Brown has no real sense of how smaller building societies and specialist len-ders have been underpinning the mortgage and housing markets for the past 10 years or more. That this funding facility is not available to smaller and more innovative players beggars belief.

And while it’s reportedly taken BoE governor Mervyn King more than six weeks to devise the plan, Mortgage Strategy can only wonder what he has been doing since last August.

The signs of a serious market adjustment were apparent 12 months ago. Last April Mortgage Strategy was among the first to highlight the problems in the US mortgage market and the potential ripple effect on the UK.

The consequences should have been thought about and possible solutions planned back then, not while munching chocolate eggs this Easter.

While the £50bn on offer may go some way to-wards freeing up the credit markets, much more will be required if we are to see a return to some sort of normality.

With mortgage Armageddon beckoning, Brown must realise that the only way he can win the next election is to halt this crisis in its tracks.

After all, you need to be on the electoral roll to vote and to be on the electoral roll you need a home to live in.

Unfortunately, the coming months may see that becoming a luxury that thousands of families will no longer be able to afford.


Banks could help out building societies

The Bank of England’ s Special Liquidity Scheme which allows banks to swap temporarily their mortgage-backed and other securities for UK Treasury Bills, does not appear to be very helpful to the majority of building societies but apparently the big players may come to their rescue.

Cheque please

The Bank of England will inject £50bn into the mortgage market to tackle the credit crunch but it could be a case of too little, too late, says Christine Toner

Packager usage up 5% in 2008

Independent research from NMG Financial Services Consulting shows that packager usage is 5% higher in Q1 2008 than it was the same time in 2007.Despite this it also shows that packager usage is slowing in the Q1 of 2008.Sue Traskowski, head of broker services at TFC Homeloans, says: “As product choice has reduced, brokers are […]

B2L withdrawal will not affect sector

Another week, another lender changes its product range. Last week it was Abbey, and the changes we have made are likely to generate more hyperbolic headlines than any others since the mortgage market started to feel the effects of the credit crunch.


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