peapod Posted August 23, 2004 Share Posted August 23, 2004 Just read that Direct Line have temporarily closed their mortgage arm while they upgrade their computer system to take into account forthcoming regulatory changes. (Full story here) Anyway, this doesn't seem sinister to me... but it reminded me that a month or so ago, another mortgage company closed to new business and hadn't given any warning.... saying it was concentrating on its backlog. I can't remember which company it was.... anyone help me out there? Also, what is they're current state of play, are they still closed? Quote Link to comment Share on other sites More sharing options...
rentboy Posted August 23, 2004 Share Posted August 23, 2004 Do you mean 'The Mortgage Business'... which was a subsiduary of HBOS? Quote Link to comment Share on other sites More sharing options...
Gavin Posted August 23, 2004 Share Posted August 23, 2004 Direct Line sponsor Location Location Location. Coincidence? Cat amongst the pidgeons? Board room arguments inspired by an irate TV 'personality'? Quote Link to comment Share on other sites More sharing options...
peapod Posted August 23, 2004 Author Share Posted August 23, 2004 I see lots of the Direct Line bus stop posters on my way home, and they just remind me of housepricecrash.co.uk. Just thinking about this Direct Line news, and one of the reasons they have stopped taking new customers on is because they don't want to put them on the old system... what company would willingly turn away customers??? Quote Link to comment Share on other sites More sharing options...
gilf Posted August 23, 2004 Share Posted August 23, 2004 Sounds like a missed opportunity to me.... "Buy now, don't start paying till October". Quote Link to comment Share on other sites More sharing options...
RJG18 Posted August 23, 2004 Share Posted August 23, 2004 Do you mean 'The Mortgage Business'... which was a subsiduary of HBOS? Sainsbury's Bank also ceased all of it's mortgage products in the same week that The Mortgage Company suspended selling. Quote Link to comment Share on other sites More sharing options...
George Mainwaring Posted August 23, 2004 Share Posted August 23, 2004 Their about to be regulated by the FSA (from October) - I wonder what difference that will make to lending practices. Quote Link to comment Share on other sites More sharing options...
RJG18 Posted August 23, 2004 Share Posted August 23, 2004 I see lots of the Direct Line bus stop posters on my way home, and they just remind me of housepricecrash.co.uk. Just thinking about this Direct Line news, and one of the reasons they have stopped taking new customers on is because they don't want to put them on the old system... what company would willingly turn away customers??? I work as a Business Analyst on very large Financial/Management systems implementation for large companies. No large systems rollout/upgrade on this scale would be planned with a complete downtime of sales operations during cutover to facilitate upgrades. If even, assuming for a moment that such a thing WAS necessay, then it would be done with considerable advance notice. If I was to propose such a strategy for a systems migration any Project Board would laugh me out of the building, and if this situation was to occur *unplanned* and cause a large company to have to completely cease part of its trading operation without notice then I would certainly be fired and my company may just start to need to worry about how much it's PI insurance premiums are going to be in future. Utter rubbish. No large company completely ceases trading an entire product type solely for this reason. Quote Link to comment Share on other sites More sharing options...
Gavin Posted August 23, 2004 Share Posted August 23, 2004 Great response RJG, from what you have said there is a lot more to this. Are we the only ones asking the questions? Why am I made to feel as though this is just conspiracy theory? Surely in the same competitive environment that sees the West Bromich (Albion) building Soc giving away free cars, it would be business suicide to close down a mortgage division for a system change, unless you were deliberately changing course. I think I will spend a little more time fantacising that it was Miss Allsop's strop that lead serious questions to be asked in high places. Think about it this way, what message would it send if Sainsbury's then Direct Line said they were pulling out of the mortgage market for fear of a crash? It would put their remianing/existing mortgage book into trouble, and how would they securitise this debt by selling it on then? I think I would make up a crackpot story as well. When I sold my house, I told the buyer it was because I was emigrating to Canada. Not a million miles from the truth (I would love to go) but not strictly the truth either. I would not say it was because I feared a crash, it might have given him ideas. Besides, the estate agent thought it was so funny, they or course encouraged me. (This was late last year). I am intrigued by this story. When Paragon pull their BTL mortgage line for fear of a millenium bug we know the game is well and trully up on the credit boom. Quote Link to comment Share on other sites More sharing options...
TWOPEY Posted August 23, 2004 Share Posted August 23, 2004 I know that there are a raft of new computing changes to finance systems both from new finance law in the UK & also from new audit legislation with regard to American owned companies (is there any US involvement in Direct line ?) but not accepting new mortgage biz due to a system change ? hmmmmm..... has that ever happened before does any one know ? Quote Link to comment Share on other sites More sharing options...
rentboy Posted August 23, 2004 Share Posted August 23, 2004 I agree RJG18, Though from what I recall the official reason for The Mortgage Business downtime was to catch up the significant backlog of lending requests that had built up. If this really was the case (I am cynical) then these huge backlogs in mortgage lendors intrays may go some way to explaining last months record CML figures? Either way, I would imagine those figures will not be topped for a while now. Quote Link to comment Share on other sites More sharing options...
gilf Posted August 23, 2004 Share Posted August 23, 2004 I have worked in I.T. for some time and implemented many large systems. I have never heard of this happening, there's always plenty of hand over time given during a transition from one system to another. The idea you would simply stop using a system for such a long period in my experience is unheard of. Quote Link to comment Share on other sites More sharing options...
RJG18 Posted August 23, 2004 Share Posted August 23, 2004 Can't find any comparable examples where something like this has occured. Replacement or upgrade of any business critical (and particularly "sales critical") systems must ALWAYS be conducted with the same kind of mentality and planning as, for example "Replacing the wings of an aircraft while it is still in flight". Anything short of this is never seen as acceptable. I should point out that there are always many many changes to financial and business systems every year due to legislative changes, and they never lead to complete suspension of sales activity. For example, did anyone suspend sales during the change to (almost) full 17.5% VAT a number of years ago, or did companies with multi-currency systems suspend trading in order to implement changes to support the introduction of the euro a few years ago. Of course they didn't. Quote Link to comment Share on other sites More sharing options...
Gavin Posted August 23, 2004 Share Posted August 23, 2004 Within the bank I work for, we always run two systems alongside each other for brief period before phasing the old one out. Everyone hates it, but always its done. There is always a short time of double input into both systems, then at the end of the overnight and end of month run, everything is cross checked to make sure it matches. You are correct that anyone who proposed the ceasation of trading simply to implement a new system or clear a back log would be laughed at/fired. Maybe our jouno friends who read this can find out more than we can and do a scoop. "In trouble mortgage lender fears crash" I reckon that my sell a few more dailies. Quote Link to comment Share on other sites More sharing options...
Lurker at the pleasuredome Posted August 23, 2004 Share Posted August 23, 2004 Maybe the bond/gilt market to sell the securitised loans into has already moved enough to dry up financing. How narrow are their financing margins. No money flow, no business. http://www.futuresource.com/charts/charts....edium&b=bar&st= Quote Link to comment Share on other sites More sharing options...
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