Saturday, Feb 14, 2009
Lenders advertising unavailable deals to appease government
Daily Mail: Mystery of the phantom mortgage
Phantom mortgage deals are being offered by lenders under pressure from the Government to help borrowers, claim angry brokers. The loans appear available, but when borrowers apply, they are turned down.
Several banks and building societies, including Abbey, Cheltenham & Gloucester, Halifax, the Post Office, RBS NatWest and Yorkshire Building Society, advertise mortgages with only a ten per cent deposit. But brokers say that borrowers are being rejected even when they have an excellent credit history, stable job and high salary.
Brokers say there is no apparent method behind the rejection of applicants. They also warn that lenders are 'down-valuing' properties, effectively reducing the amount that can be borrowed.
Posted by little professor @ 05:04 PM (1359 views) Add Comment
10 Comments
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1. Crunchy said...
Lenders advertising unavailable deals to appease government- Gordon (con man) Brown's style in a nutshell.
2. quiet guy said...
I cannot decide whether the current mortgage market is unusually difficult or we are returning to traditional lending standards. Either way, the easy money is clearly gone and prices will have to reflect that in the end. Ray Boulger's talk of "the first glimmer of interest in the property market" seems a bit optimistic.
3. ketha said...
This article is a bit deceptive. I know for a fact that this is true but it's not for 'no reason'... there's a difference between Credit File and your overall 'Score'.. the 'Score' lenders use takes in far more information than the credit file.. some of it based on profiling to some degree... Single people are likely to fail, FTBs are likely to fail, people with no savings are likely to fail, younger people are likely to fail.. because they are more risky....
The lenders are expecting at least another 10% fall, so a 90% mortgage is a 100% mortgage by any standard. They can only justify this to a small number of low-risk people...
It's not the banks jobs to underwrite the nations prosperity... if the government are so worried why don't they give everyone 5% deposit.
4. justwatching said...
ketha
5% deposit?
No
Buyers need to SAVE for a deposit. If they don't have one they should either rent or live with the rents.
'Down Valuing'
Ha Ha.
5. nickolarge said...
'Down Valuing'?
In a falling market any valuer is going to be ultra cautious.
Doesn't matter what kind of market or who the valuer is. Of course, if his client is the lender that caution will be greater....and so it should be.
6. Refugee said...
Sounds like the banks are being misleading on one hand and sensible on the other. The thing I take from this is that vested interests like brokers whould just shut up and hiss off. Brokers are the ones who were doing most of the lying during the boom years to secure mortgages for people who ought never to have been allowed to borrow. They start carping now about banks misleading. Pot and kettle.
By the way, who nominated this Charcol shark as a spokesman for anything but vested interest, he's a mortage broker. Sick of hearing him, gob for rent.
7. thelostdecade said...
90% mortgages + real possibility of further 30-50% fall in house prices + recession/weakening job market = potentially another truck load of bad debt for british banks
+ the executives of british banks been vilified by pretty much everyone for taking too much risk over the past 3-5 years
= stricter lending criteria, simple
8. Russ said...
Quote:"I cannot decide whether the current mortgage market is unusually difficult or we are returning to traditional lending standards."
I dont think we are returning to traditional lending standards because if you do a quick quote on the halifax mortgage calculator you can still get 5 times dual income, whether they give you this when applied for is another matter.
Although if my mortgage application did go through, got an offer on accepted, then the bank wanted to knock a further 10% off thats fine with me, relay this to seller, they either accept this new lower offer or its a fallen through sale, much heartache for the seller! save me more money !
9. crashpad4me said...
It appears to me that banks have "phantom" savings accounts as well, where the interest rates quietly slip to next to nothing unless you change accounts. Good for attracting new business, not so good for existing clients - which strikes me as contrary to one of the golden rules of business, that your client base is your best asset.
10. Tenyearstogetmymoney Back said...
quiet guy said...I cannot decide whether the current mortgage market is unusually difficult or we are returning to traditional lending standards.
The question is What are traditional lending standards ?
Back in 1986 I had no problems getting a 93% mortgage. The application was handled by the estate agent
and I didn't have to go and see the building society. Howver to put things in context:
I had been a member of that building society for about five years. Common advice was that you should be a member
for at least two years before considering applying.
I didn't have any debts. In fact my 7% deposit was only about half my savings in that building society.
I have said before how a friend who had taken out a loan to buy a second hand Renault 5 had that
amount deducted from his three times salary maximum loan amount when he applied for a mortgage.
You accepted the mortgage offered to you. Back in those days the choice was endowment
(highly recommended by everyone in the industry) or repayment, both at the standard variable rate.
Finally most importantly house prices had gone up 10% in the last two years, which as my solicitor commented,
was really good.
If you go back a bit earlier an older colleague told me how in the 1960s the building society manager didn't like
his choice of house but told him which houses he was prepared to give a mortgage on. Perhaps we are back to traditional
lending standards in that respect.
:- Duncan