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House Price Crash Forum


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About remorsefulbroker

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  1. Gazumping and gazundering will not disappear until the laws on property purchasing are changed to prevent it. It doesn't happen in Scotland, as I believe they do all the necesary background stuff first, so in effect their offer is the equivalent of our exchange of contracts. That said, sellers have been happy to allow gazumping for years. So I'm really struggling to sympathise with them now that the boot is on the other foot.
  2. Higner Lending charges are still around, however borrowers only tend to pay for this if borrrowing exceeds 90% LTV. Otherwise the lender covers the cost. You didn't think lenders stopped covering their arses did you??? This insurance gained notoriety when some total doofus based in Essex started advising borrowers in arrears to hand in their keys and walk away, conveniently forgeting to tell them that in 5, 6 even 7 years time they might get a knock on the door from a representative of the insurance company, asking for £50K. It ruined families who thought they had put the bad times behind them.
  3. I think that, as a previous poster said, you really need to think long and hard about whether purchasing is right for you. Not just about the finance (which is obviusly important) but also, by doing your research so that as best as possible, you are buying at a reasonable price. You do not sound like you are speculating which is good, as in my opinon (surprise, surprise!) values will continue to drop for the foreseeable future. So your main concern should be your ability to maintain your mortgage and associated living costs (doesn't matter if your property is worth £50K or £500K, if you can't pay the mortgage on it your're screwed!). If you are adamant about buying then I would recommend the following: 1) as well as speaking to your Bank, try and speak to a Mortgage Broker as well. Make sure that they are whole of market and also, establish whether they charge a fee for their service or not (as the mortgage amount required is relatively small, this may be the case). They should have access to a high street lenders, that will be a bit more flexible with regards to your partner's credit history e.g. Chelsea Building Society 2) make sure that you are clear about what you can afford, maybe based on your income not increasing for the forseeable future in which case, exploring a fixed rate for as long as possible may be a good idea. Remember that this will not just be the mortgage payments, but also council tax, gas, electric, water etc. Plus you have to feed and clothe yourselves as well. 3) consider protecting yourselves against unexpected loss of income, due to accident sickness or redundancy. The government will not help you for 39 weeks if you cannot pay your mortgage (and believe me, if you had made no payments you would be repossessed by then) 3) PLEASE PLEASE PLEASE do not entertain any talk about enhancing your income. It will come back to haunt you but more importantly, it's a crime! 4) Make sure you are aware of the costs involved in purchasing. On top of your deposit you will also need to pay for a property valuation, Solicitors costs and possibly specialist reports (timber & damp, eletrical, drainage, this will depend on comments in the survey). Also be aware that you will have to make up any shortfall if the property does not survey as high as the purchase price. Remember that the lender will base maximum borrowing on the lower figure of the purchase price and valuation. I hope this helps but I really think that waiting a few months could get you the same property/property type for less.
  4. HBOS Group did self sert via their Bank of Scotland, Birmingham Midshires and TMB brands (TMB has now gone). As well as that, TMB also did buy-to-let with no rental income assesment, but based on the purchasers self certified income. So yes, I would say that they have a huge amount of self cert on their books. You've then got all the Fast Track business done with Halifax & Intelliget Finance (although they have more stringent underwriting so those deals are more likely to be OK)>
  5. As I said I got bored. However I could also have added Bank of Scotland (at one stage you could effectively self cert up to 95% LTV with them!), Birmingham Midshires, Bristol & West, Bradford & Bingley (via Mortgage Express), Nationwide (via UCB)......sorry bored again. Also fast track and not self cert are different. With self cert the lender will never ask for proof of income. If they are not happy with the application they will simply decline it. With Fast Track the lender may not ask for income, if they are happy with everything else on the application. However they reserve the right to. However the Broker must have proof of income on file, because as far as the FSA are concerned, Fast Track cases are status (i.e. proof of income supplied), from a compliance point of view. Lenders simply have Fast Track to cut down on admin.
  6. Will also happen in the UK, albeit on a smaller scale. Just swap the name of the lender to SPML, or Kensington, or GMAC, or Salt, or Rooftop, or Victoria Mortgages, or Preferred..... (I'm bored now!)
  7. When you purchase a RTB, the terms are quite clear. The council have a legal obligation to advise of any work due in the next 5 years, but can only give estimates of the cost. If you buy in a block then you must be aware that expensive works may have to take place while you own it (new roof, windows, lift etc). Plus the lower the amount of leaseholders in the block, the higher their proportion of the cost will be. Seems like a typical case of going into RTB with just profit in mind, rather than the potential high costs of ownership.
  8. Hello. This is the wrong place for this type of enquiry but never mind. You can get the credit reference agency to register a dispute against the information held about your partner. However on the basis that you require a 95% mortgage and at the moment these are only available from prime lenders (and of those I think only Halifax still have anything remotely competitive), you are going to struggle for a mortgage. The best thing would be for your partner to apply with his existing bank, as he already has a relationship with them and they may be more flexible, especially if he can show them a copy of his credit file, with the disputes registered. Going elsewhere would be pointless at this stage, as I asume that the debts are not satisfied. Hope this helps.
  9. Penalties for mortgage fraud became harsher when the mortgages became regulated by the FSA around 2005/6 (prevoulsy it was just the Mortgage Code). Now I believe the maximum jail time is around 7 years. The fines can be hefty (over £100K is not unusual), with discounts available based on ability to pay and speed of payment. Obviously the offending Broker then has all advising permissions removed. The Police do get involved, however it seems that't it's only for large scale mortgage fraud. I suppose it could be argued that the courts (and probably the general population) believe that muggers, rapists, peado's etc are more deserving of being locked up than dodgy mortgage brokers (although you may disagree if your house got repossessed because your 8 X income, sub prime self cert, interest only, extended early redemption penalty mortgage rate had just increased from the barely affordable 8% fixed to an eye watering 11% variable!!)
  10. Fraud has been made much easier by the lenders, full stop! In the first instance, the use of Packagers makes it a lot easier, as they do not always report frauduent applications but just send it straight back to the Broker and in some instances, continue to accept future applications from them. Also they are allowed to deal with too much of the underwriting process. On top of that, a lot of lenders do not now ask to see the money laudering documents from the applicant, as they do remote I.D. verification (i.e. checking the name matches that on the voter's role) and applications can be submitted on-line so not even a signed application is required. If the case is going via a Packager, the process would typically be as follows (and remember, almost all applications sent via a Packager would be sub-prime, self cert and buy-to-let, the type of applications where the majority of fraud would occur): 1) applicant sees Broker and broker collects money laundering documents (proof of I.D. and address), proof of income, bank statements etc. All this info can be certified as original seen by the Broker 2) Broker sends documents to Packager who acts for the lender. They also instruct the survey and, can chose which company to use (as long as the particular company is on the lender's panel). Packager can also request references if required (employers, Accountants etc) 3) Offer can be agreed and underwriten at the Packagers by a remote Underwriter employed by the lender. Doens't take a genius to spot the parts of the process where fraud can occur on just a singe application. The larger scale frauds are mainly on new build properties and in my opinion, also involve Developers, Solicitors and Surveyors (I believe Thamesmead in SE Lodon has been particularly prone to this).The FSA has for too long been more interested in making sure that a Broker has the right date on a quote or a signature on a Fact Find (compliance issues), than tackling fraud. It's only now that things are going tits up and the lenders are starting to lose money that they are getting involved. This is no excuse for dis-honest Brokers (who if found guilty of this behaviour should definately be prosecuted). However you will find that once the full scale of fraud starts to be uncovered, the lenders will just stand back and say "it's not our fault, we trusted the Brokers/Packagers to be honest with us"!, conveniently forgetting about their lax underwriting procedures. Fraudsters will always exist, however there are ways that it can be made more difficult e.g.1) abolish self certification2) insist on seeing original documents (yes a pain but surely lenders can afford the courier costs for collection and return of these documents, when compared to the lost they could incur from a fraudulent application). If not, insist documents are certified by an independet Solicitor (less likely to certify a copy without seeing the original)3) Surveys instructed by the lenders, not the Packager4) income proof only accepted via an employers/Accountants reference (no more dodgy payslips)5) Arrangements for banks to confirm bank account activity direcly with the lender (no more dodgy bank statements) In fact maybe the Broker should just advise on the product requirements, allowing the lender to do everything else! The problems is, would borrowers be happy with lenders increasig their costs to cover this?
  11. Hi people. I'm brand new to this forum and I noticed that not to many Mortgage Brokers (if any), seem to be members. So I thougt why not be the first to stick his head over the parapet! I pretty thick skinned so feel free to swear at me as much as you like. Unsurprisingly I've got a lot of time on my hands at the moment, seeing as the enquiries haven't stopped but the lending has (only written 5 mortgages in the last 3 months). With a missus and, 2 boys who are almost as big as me (and eat even more than I do), I need a stable income (i'm self employed). So I getting out, starting with a few night shifts at the local Sainsbury's while various Recruitment Agencies get off their arses and find me something else. Anyway I digress. As much as the current situation has cost me my livelyhood I'm not as upset as you may think. In fact I believe the crash is a good thing. Obviously prices were way too high and one of the reasons that anyone could still purchase was due to the the lax lending criteria adopted by the lenders, which is where people like myself come in. Mortgages are offered by lenders. They devise the products which a Broker can advise on. If the lender says " will will lend yo 5 X your joint income" then I can submit an application on that basis, even if it may leave them £100.00 a month to live on. If a lender says "we don't need to see proof of income" then the FSA says neither does the Broker (although you have to justify why). If the lender says "we will lend to you, even if you have a track record of defaulting on your debts" then you can recommend a sub prime product. If the lender says " we will accept a 25% discount on a new build so you don't have to put down a deposit" then you can submit a case on that basis, even though they know new builds sell at a premium (just like a new car) and, is probably overpriced anyway. If the lender says "we will accept an Accountant stating your income, rather than seeing a full set of Accounts" then you can submit a case on that basis (even though there are Accountants out there who will sell their granny for £500.00 (most based in South East London and with a surname that ends in a vowel). I could go on. My point is us brokers get a lot of grief and unfortunately due to the actions of some Brokers (too many in fact), a lot of it is justified. However lenders gave us the tools to work with (and the FSA our advise/seling guidlines), knowing full well that if things go tits up, they can simply blame us. We are the first step in the underwriting process however we can only make sure that as best as possible (and doing our best to combat fraud), the application fits the lender's criteria. We do not make the decision to lend, that's down to the lender's own Underwriter. It's also a results business. Generally Brokers are paid when a case completes. Any client who needs to borrow 3 X salary and had a 10% deposit is not going to pay me a fee to do a high street deal when they can find the product on the internet and do it themselves. Even if I did recommend high street, they would simply use me as an information service and go direct anyway, so I'm working for nothing (the general public does not see Brokers as professionals in the same way as Solicitors or Accountants and due to what's happening now, never will!). So of course the bulk of a Brokers business (unless you were lucky enough to have a client base full of high earners), was always going to be full of self cert, sub prime and buy-to-let), and the lenders knew this. Even an employed Broker would soon be out on his ear if he wasn't writting enough business to justify his salary (we are still seen as sales men, which I could start a whole new topic on!). Anyway, I sure that anyone who has read this far just wants to know if I have a point to make or, am I just a whinging twit (thought I'd get that in before anyone else does). Well it's a bit of both. With hindsight I wish I had stayed working for a high street bank and never went near specialist mortgage products. I say this because I have arranged mortgages where I felt that if my client couldn't maintain a £10K personal loan, how the hell are they going to maintaing a £200K mortgage (never mind why they haven't used their deposit money to pay off their debts instead). I've arranged buy-to-let mortgages on new build flats where the rent is the same on the mortgage, after explaining that when the fixed rate ends and their payments go up by £300.00 per month, the rent will not have increased by this level, if at all. I've arranged 125% mortgages, after explainng that the client will immediately be in negative equity, which may take years to rectify. I arranged interest only mortgages, after explaining that the mortgage balance will not be reducing, increasing the risk of negative equity. I did all this because the lenders had products which accepted it and, the FSA permited it. And you know what? I'm sorry I did. The cynics out there will say that if the crash hadn't happened I still be out there writting mortgages using questionable products and subsequently, fuelling a grossly over priced market. Maybe. However I've had the chance to look into my concience and, I wish I could have looked beyond the £ signs, saw what was staring me in the face and got out of this business 3 years ago when it was obvious what would happen. What's really weird is, I don't even own a property. When we could have bought, me and the missus prefered the pub and holidays. After the kids were born we couldn't afford it (I wasn't stupid enough to self cert so, does that make me even more of a ******* for arranging mortgages for other people on this basis?). Luckily we rent a huge 2 bed flat from a Housing Association, for less that the price of a single room in some parts of London. I always thought that having a decent roof over you head was the most important thing, owning it is a luxury for those who can prove they can afford it. So, that's that of my chest. Thanks for reading and feel free to start slagging me off.
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