crown

The mortgage broker

The paper is here http://www.fsa.gov.uk/pubs/discussion/dp09_03.pdf It should be noted that this is a discussion paper which will lead to legislation this time next year. For those who are not aware of the way the FSA works it is this The FSA decide what they want to do, they issue a discussion paper, the industry comments, the FSA issues a consultation paper, the industry consults and the FSA legislates. Very little changes between discussion and legislation. Lenders now know where they are going to be in a years time, they will be adjusting their practices over the next few months. Although they will not be covered by any rules, the FSA takes the view that ones the industry has been given a 'heads up' they need to adjust their practice. The FSA have their ' Treating customers fairly' rules to impose fines and sanctions without specific rules being broken. The 2 key passages - regulating B2L As with second and subsequent charge lending, there are a number of reasons for our market analysis extending to the question of BTL regulation. There appears broad consensus among commentators that BTL has played a full part in fuelling property price appreciation. As well as being a general contributor, BTL funding has particularly helped to inflate prices of certain property types and locations, such as city centre apartments. The overall impact on house prices inevitably has implications for our interest in the sustainability of the mortgage market. Regulation of BTL should improve the quality of borrowing and lending decisions, going some way to alleviating this upward pressure. Making lenders responsible for mortgage affordability. i.e. if they do not verify and the mortgage defaults, the lender will be liable. ouch. In our view, a key problem has been the lack of proper affordability assessments. Over several years, our various thematic reviews of mortgage lenders and intermediaries have found evidence of irresponsible lending practices and inadequate affordability assessments.We believe that there is significant scope to tighten our responsible lending standards. 1.30 We propose making the lender ultimately responsible in every sale for verifying affordability.We also propose that in each case, lenders assess consumers’ borrowing capacity based on free disposable income. As a way of promoting debate around this issue, we have included in the DP an example of current industry best practice for assessing affordability.We also discuss whether we should prohibit lending to consumers with low borrowing capacity; whether there is a case for assessing the affordability of an interest-only mortgage on a capital repayment basis; and also whether there is a need to limit the amount of equity a consumer can take from their home. This will start to contract lending limits from next month as the lender issues notices to brokers on new borrowing affordability tests. I still stand by my market bottom http://thecrownblogspot.blogspot.com/2008/07/time-to-buy-index-for-june-2008.html although this news will push the bottom towards Q4 2010 or Q1 2011

http://www.lloydsbankinggroup.com/media/pd...dexJuly2009.pdf

The lenders that have the majority of the mortgage market have a SVR of around 3%. Most borrowers coming off their deals are opting to stay on the SVR. As the SVR creeps back up to the long term average, then they will have to take a rate deal of around 5%+ if they have enough equity

yep the housing market is suspended at the moment by the low interest rates. As and when they are increased expect to see the housing market fall further. There is a big difference between a SVR of 2.5% now and the historic average of 7.5%

The Guardian have made the mistake of looking at the Menu given to them and thinking that the maximums quoted are the actual commission payments. For example my Menu says maximum commission of 4% of investment and 0.5% trail or fees of £125 an hour. If I am discussing investing £50k then the fee I would charge would be £1000 which equates to 2% commission with 0.5% trail. If you want financial advice and do not want to advise yourself, you have to see 3 IFAs and negotiate the actual fee/commission that will be charged by that adviser. Using the menu is a waste of time.

This report exposes most of Brown's lies about the state of the housing market pre and post bubble burst. http://www.imf.org/external/pubs/ft/scr/2009/cr09212.pdf

I've only watched the first 10 minutes so far but a couple of observations The initial sales meeting, whilst trying to copy Glengarry Glenross was entirely accurate, I've been in enough in years gone by. I have met many mortgage brokers like this guy, but most mortgage brokers thought they were doing clients a favour by getting them a big loan with enhanced earnings. They did not think that they were preying on anyone, they did not buy lists. Oh and by the way nobody had to 'grease' any palms for a list of dodgy credit names. I was being offered lists like this by reputable companies and websites for a few hundred pounds.

attached latest graph

I have that clip - it will be put into a compilation of his best crazy bits to 'I'm going slightly mad' by Queen

Gordon Brown's best PMQ answer ever - 0% growth Watch it here http://tiny.cc/liar138 he is delusional

Currently there is no problem, but this is another ticking time bomb. I have had many phone calls from clients coming off their fixed rates of around 5/6%. They want a new deal. They can either go onto the SVR of around 2.5% with no fee and no bother or stay with the lender and pay a fee of around £500 and get a fixed rate of around 5% if they have equity. So if they have no equity or don't want to pay a fee their monthly payments will drop. Happy Days Until the lender starts to price up the SVR. My prediction - around September the SVR will start to rise, in time for the FSA to stick their noses in and cap lending. The second and final leg down of the housing market will start. Those stuck on the SVR enjoying the low rate will find their payments trebling over the next 2 years.

Liar Loan heaven http://www.moneymarketing.co.uk/cgi-bin/it...h=341&f=342 Former HBOS mortgage chief Michael Bolton has claimed that up to 80 per cent of mortgages lent by the group before the credit crunch were accep- ted without proof of income.

A bit of light relief while we wait for the Euro results Watch it here http://thecrownblogspot.blogspot.com/2009/...faces-lord.html

I'll let Fraser Nelson explain http://www.spectator.co.uk/coffeehouse/367....thtml#comments Labour's planned cuts were so well hidden in the Budget that no Fleet St newspaper either spotted them on the day or spoke about them subsequently. Yet the Institute for Fiscal Studies did pick up on them, and I blogged their discovery at the time. To remind CoffeeHousers: Brown had Darling mislead the House in claiming spending would rise by an average 0.7pc a year in 2011-14. The truth is that it will be cut by an average 2.3pc a year over this period - actual cuts of £22bn a year. Brown has never admitted this, nor have the Tories raised it - fearful of being asked what they would cut. As a result, the public is being kept in the dark about the sharpest spending contraction in UK postwar history.