Mortgage Express - Oh Dear

[crown]

We are withdrawing all mortgage deals and products over 85% LTV

In recent weeks we have seen a number of significant changes in the market, most notably lenders withdrawing from segments of the market, or repricing their deals significantly. As a result we have seen substantial increases in levels of new business, particularly on our non-core products.

In order to maintain service standards and ensure that we continue to support our intermediary partners in our core markets, we are withdrawing a number of non-core deals at close of business today, Wednesday 12 March 2008. This means that the following are no longer available:

• All mortgages in our Standard range

• All mortgages in our 100%+ and 100% Extra range

• Buy-to-Let Extended Criteria 90% LTV

(this applies to both Buy-to-Let for individuals and Limited Companies)

We are also withdrawing our Self Cert 2 year deals at 85% LTV – the range will be limited to 3 year deals only.

Removing these products will allow us to focus on providing you with specialist mortgages in our chosen markets – Buy-to-Let, Self Cert and Lifetime.

The final dates for our existing product range are:

• Binding decisions Midnight 12th March 2008

• Unpackaged applications 19th March 2008

• Packaged applications 9th April 2008

• Offer issue 23rd April 2008

• Completions 6 months after original offer issue date

We will update our core and exclusive product rate sheets as well as our product and marketing literature in due course.

If you have any questions about these changes, contact your local BDM. Please click here for their details.

Jacqui Simmons

Email: jacqui.simmons@bbg.co.uk

Tel: 07918 905667

[thecrashingisles]

This means that the following are no longer available:

• All mortgages in our Standard range

That can't leave much else?

Are they Bradford and Bingley?

Edited March 12, 2008 by thecrashingisles

[Lone_Twin]

we have seen substantial increases in levels of new business, particularly on our non-core products.

In order to maintain service standards and ensure that we continue to support our intermediary partners in our core markets, we are withdrawing a number of non-core deals at close of business today,

Does this not translate as "We are being swamped with sub-prime re-mortgagees (becuase there is no surge in new business lets be honest) and in the expectation that we will waste time applying for mortgages they won't get we are going to cut them off now"

.

Good post thanks.

.

ST

[Converted Lurker]

"We are withdrawing all mortgage deals and products over 85% LTV" that was the bulk (iirc 90%) of their business Worth creating a sub prime death watch now? I'm going for Freedom/Wave to go, then Preferred, SPML.

Edited March 12, 2008 by Converted Lurker

[bobthe~]

That can't leave much else?

Are they Bradford and Bingley?

they sure are. the email address gives it away, particularly to those of us who worked there for a wee while.

[bobthe~]

"We are withdrawing all mortgage deals and products over 85% LTV" that was the bulk (iirc 90%) of their business Worth creating a sub prime death watch now? I'm going for Freedom/Wave to go, then Preferred, SPML.

Aren't SPML South(ern) pacific? Which is NR isn't it? I thought there was a post here saying they had already announced they weren't going to do any more SP business.

Always happy to be corrected.

[dellboy]

It's a very healthy positive feedback mechanism (if you are a first time buyer):

- Prices look as if they will go down, making the high LTV deals very risky.

- Lenders pull the riskier deals and force buyers to hand over more cash up front to act as a buffer.

- Ofcourse, this reduces the availability of money to buy houses, empowering people with cash in the bank.

- Cash-rich investors only have the cash because they know how to handle their money and know that prices MUST come down now.

- Feedback loop completed.

So, the only question is when will the feedback mechanism become negative, i.e. when will the banks' lending availability support a stable house price? I believe that history shows us that the risk-reward-ratio during a stable housing market is about right when prices are no more than 3.5 times salary.

[The Masked Tulip]

they sure are. the email address gives it away, particularly to those of us who worked there for a wee while.

Yesterday B&B backdated an IR savings cut to the begining of the month and now they are doing this - are they in serious trouble? Are they about to go under Northern Rock style?

[Timil]

Oh deary deary me.

[_w_]

We are also withdrawing our Self Cert 2 year deals at 85% LTV – the range will be limited to 3 year deals only.

Wot??? So they are _still_ doing self certified??? I would have thought this charade would have been first to disappear!

[nmarks]

More like Mortgage Slug than Mortgage Express then.

[dellboy]

Wot??? So they are _still_ doing self certified??? I would have thought this charade would have been first to disappear!

Self-certified is still open to scrutiny, if they so choose. The applications still require the disclosure of accountant's details, past income, etc. They can easily mitigate the risk by following up a statistically significant percentage of the applications. They'll have actuaries that will tell them how many they need to investigate in order to reduce the risks to a profitable level.

[gilf]

Wot??? So they are _still_ doing self certified??? I would have thought this charade would have been first to disappear!

There is nothing wrong with self-cert, in fact it is vital for some people.

The charade was that the banks were not checking the figures supplied were correct, which was pretty easy to do if they were that bothered about doing so.

[_w_]

Self-certified is still open to scrutiny, if they so choose. The applications still require the disclosure of accountant's details, past income, etc. They can easily mitigate the risk by following up a statistically significant percentage of the applications. They'll have actuaries that will tell them how many they need to investigate in order to reduce the risks to a profitable level.

Oh. I thought serlf certs were by definition 'self-certified' as in 'you certify it because we don't' or as Mr Eric Pebble woud say, 'liar loans'.

[fluffy666]

It's a very healthy positive feedback mechanism (if you are a first time buyer):

- Prices look as if they will go down, making the high LTV deals very risky.

- Lenders pull the riskier deals and force buyers to hand over more cash up front to act as a buffer.

- Ofcourse, this reduces the availability of money to buy houses, empowering people with cash in the bank.

- Cash-rich investors only have the cash because they know how to handle their money and know that prices MUST come down now.

- Feedback loop completed.

So, the only question is when will the feedback mechanism become negative, i.e. when will the banks' lending availability support a stable house price? I believe that history shows us that the risk-reward-ratio during a stable housing market is about right when prices are no more than 3.5 times salary.

Yes, when we reach the point where 25 year repayment mortgages match rents for similar properties (or overshoot a bit). 30-70% drop depending on location, recession, global economic meltdown, that sort of thing.

[gilf]

Oh. I thought serlf certs were by definition 'self-certified' as in 'you certify it because we don't' or as Mr Eric Pebble woud say, 'liar loans'.

Not exactly, they are for people who cannot verify their income using the normal methods i.e. pay slips. Normally this would be the self employed etc who don't have a steady income. They could for example work on contracts where once the job is finished they get a lump sum but might not be able to verify that with wage slips and bank statements. What should happen is that the person getting the mortgage would get their accountant to confirm what they earn.

However as you correctly point out they have been used as liar loans, used by people who can verify their earnings but in doing so would not get a mortgage large enough. The banks were never really bothered as the property was always the collateral in the deal, if the person couldn't keep up payments they could just reposses and get their money back. However there was FSA legislation introduced back in 2006 (might have been 2005) which meant that the banks were now liable if the person taking out the loan had lied, previously that had not been the case.

[dellboy]

Oh. I thought serlf certs were by definition 'self-certified' as in 'you certify it because we don't' or as Mr Eric Pebble woud say, 'liar loans'.

That's how they advertise it and indeed what they, in effect, were. But there's a big gap between marketing and reality:

This is what Mortgage Express advertise:

Our 'true' self certification mortgage requires no proof of income and is ideal for the self employed, those with numerous sources of income or simply for people who may not have the time to produce proof of income.

But this is what they mean by "true":

Self Employed

In present business for a minimum of 12 months.

A full 3 years employment history is required.

Contractors

Must have a 3 year track record in the same

employment sector.

PAYE applicants on a contract must be on a 12 month

renewable contract with at least 6 months remaining.

Self employed professional contractors must be employed

for 12 months or at least one contract successfully

completed and a subsequent contract started.

For sub contractors refer to Mortgage Express.

Status

Self Cert.

So, you don't have to show your income, but you have to show that you worked in a particular sector for so long, etc. Same thing, really. And then, as I said, my wife and her boss were requested to provide their accountants' details in order for their applications to proceed.

Edited March 12, 2008 by dellboy

[winkie]

...quality not quantity.