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Bm Solutions Will Withdraw All Of Its Self-certification Sub-prime Mortgages On Sunday

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BM Solutions will withdraw all of its self-certification sub-prime mortgages on Sunday to help reduce its business volumes.

It is also reducing the maximum LTV on all status sub-prime deals from 90% to 80%.

Tim Hague, managing director of BM, says: "It's not a credit issue, it's about managing our volumes.

"We've tried using pricing as a lever and it just wasn't working, so we're having to be a bit harder on our lending criteria, which isn't ideal but it's something we're being forced to do."

http://www.mortgagestrategy.co.uk/cgi-bin/...h=401&f=402

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I don't get this.

They actually want to cut business? They've tried charging people through the nose and people are still coming?

Why don't they just double their rates and hire a new load of people? Don't they want to make more money is this downturn?

Or is it perhaps, precisely to do with credit.

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They actually want to cut business? They've tried charging people through the nose and people are still coming?

Lovely, isn't it? "Market share? No, we don't want any of that, thanks. We just want to quietly go bust. Nothing to see here."

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I don't get this.

They actually want to cut business? They've tried charging people through the nose and people are still coming?

Why don't they just double their rates and hire a new load of people? Don't they want to make more money is this downturn?

Or is it perhaps, precisely to do with credit.

The only logical reasons for not lending out money to make a profit are :-

1. You don't have the money to lend (or the money is too expensive)

2. You don't believe the borrower will pay it back (i.e. the borrower's business model - house prices - is suspect)

Either way, this points to a deterioration in the housing market, I assume.

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This is the clever semantics that many lenders have been using to arguably good effect over the past couple of weeks, it's been tried and it appears to work. "We can't cope with the volumes of business, we've tried the carrot now the stick". Translates as; "We can no longer originate cash, to then lend, to then package and flog. The system as we knew it is completely broken" <_<

Edited by Converted Lurker

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Some serious questions need to be asked about why big players were using offshoot companies to carpet bomb the market with this trash in the first place.

More questions need to be asked about where liabilities lie and what the purpose was for using other brand names and what was to be gained as a result.

Bit like why nobody asked about Northern Shithouse's charity/MBS shenanigans until the taxpayer was put on the hook for the losses.

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d'ya know what's interesting in terms of a development? The only game in town, (for those aggresively following the mortgage commissions, as the mortgage industry implodes) has been remortgaging. Now with lenders quickly approaching a mind set of refusing any sub prime without 20-25% deposit/equity, based on far stricter valuations, this business is going to be choked off as well. Re-mortgaging saw a 43% yoy Jan to Jan increase, according to the latest cml data. This is now the micro sector to watch for evidence that the well has truly run dry. :o

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Interesting how these announcements are getting more and more frequent, isn't it?

Imagine the scenario in the back office of one of these firms when, all of a sudden, the number of applications shoots through the roof and you find you are inundated with applications for mortgages that you would have approved and welcomed last month.

The fact that you've got so many more applications is a big indicator that your competitors have tightened up their lending criteria and you've been caught on the hop.

Of course, if you're still bullish and have the money to lend, now's the time to make a killing and grab a huge swathe of market share, but if you're wrong, you're dead in the water.

Sentiment has turned in the lending market and it takes a long time or a very large event/change of conditions to turn it back again.

Better get ready to do the diving trick of pinching your nose and blowing to equalise the pressure; we're descending rapidly from here on......

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Interesting how these announcements are getting more and more frequent, isn't it?

Imagine the scenario in the back office of one of these firms when, all of a sudden, the number of applications shoots through the roof and you find you are inundated with applications for mortgages that you would have approved and welcomed last month.

The fact that you've got so many more applications is a big indicator that your competitors have tightened up their lending criteria and you've been caught on the hop.

Of course, if you're still bullish and have the money to lend, now's the time to make a killing and grab a huge swathe of market share, but if you're wrong, you're dead in the water.

Sentiment has turned in the lending market and it takes a long time or a very large event/change of conditions to turn it back again.

Better get ready to do the diving trick of pinching your nose and blowing to equalise the pressure; we're descending rapidly from here on......

That scenario is on the money, generally driven by packagers. Problem is no one appears to want the market share.

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There's not enough money to service everyone, so we're concentrating on higher-quality debt.

I think that is spot on.

They raised their prices but still didn't like the look of the people that were applying for loans. They will sit back for a bit maybe then decide what sort of loans they really want on their books for the next few years and how to spot the diamond borrowers from the rest.

Perhaps if they put a diamond portfolio together one day they might be able to pass it on.

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Sadly this doesn't bode well for a self employed STR like myself... particularly as I've run my business at a loss this year while I'm investing.

Unless house prices drop 50% and I can buy without a mortgage that is. Of course, the disappearence of self-cert and 90% LTV's hastens the day when I can do just that. I hope this happens and not just for myself... it would be better for nearly everybody.

Edited by 2MeterBear

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"We've tried using pricing as a lever and it just wasn't working, so we're having to be a bit harder on our lending criteria, which isn't ideal but it's something we're being forced to do."

Flight to quality. And a return to traditional lending standards.

Since neither of these trends cater to the speculative aspects of the housing market, this seems to be the clearest indication yet that less money will flow into the housing market with predictable results to follow.

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Sadly this doesn't bode well for a self employed STR like myself... particularly as I've run my business at a loss this year while I'm investing.

Unless house prices drop 50% and I can buy without a mortgage that is. Of course, the disappearence of self-cert and 90% LTV's hastens the day when I can do just that. I hope this happens and not just for myself... it would be better for nearly everybody.

Yes, I'm probably in a similar situation to you; I've deliberately not withrawn profit over the last year or so (why would I? There's sod-all to spend it on) so I'm going to have to go through some serious hoops to prove why I'd be a good risk for a mortgage. But you know what? That's how it should be, and if I have to show a lot of information to lenders to convince them to lend me money I will be happy that the market has regained some sanity.

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Yes, I'm probably in a similar situation to you; I've deliberately not withrawn profit over the last year or so (why would I? There's sod-all to spend it on) so I'm going to have to go through some serious hoops to prove why I'd be a good risk for a mortgage. But you know what? That's how it should be, and if I have to show a lot of information to lenders to convince them to lend me money I will be happy that the market has regained some sanity.

2MeterBear and Paddles...

I don't know if this is any help for when you go for the next mortgage, but One Account have approved me on a £28k yearly dividend payment at 70% LTV. Yes, it's self-cert, but it's truthful - I had to send in last accounts, three months' personal and business bank statements and have a letter from my accountant.

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2MeterBear and Paddles...

I don't know if this is any help for when you go for the next mortgage, but One Account have approved me on a £28k yearly dividend payment at 70% LTV. Yes, it's self-cert, but it's truthful - I had to send in last accounts, three months' personal and business bank statements and have a letter from my accountant.

Nice one, good to know Pacific State. Thanks.

The thing I don't understand is, why is it called self cert if you have to show accounts? "Self cert" sounds like "well, I have this income but I can't really show you any evidence of it because it kinda magics it's way into my bank acccount in such a way that the balance doesn't actually increase".

What you've described is a business owner showing clear historical records of income and profit against which a lender can asses the level of risk; i.e. how it should work.

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Some serious questions need to be asked about why big players were using offshoot companies to carpet bomb the market with this trash in the first place.

More questions need to be asked about where liabilities lie and what the purpose was for using other brand names and what was to be gained as a result.

Bit like why nobody asked about Northern Shithouse's charity/MBS shenanigans until the taxpayer was put on the hook for the losses.

Agree TOTALLY OnlyMe..... Just another example of the SCAM CULTURE.....

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2MeterBear and Paddles...

I don't know if this is any help for when you go for the next mortgage, but One Account have approved me on a £28k yearly dividend payment at 70% LTV. Yes, it's self-cert, but it's truthful - I had to send in last accounts, three months' personal and business bank statements and have a letter from my accountant.

Not strictly speaking self cert in that case.

Self-cert is where you just SAY you have that divvy payment and they go "Oh, OK then". ;)

Incidentally, I was one of the poor muppets who was going to have a laff with the 4homes property fantasy league (which did quite well and lost 6300 last month). Since they said that 2bn of City bonuses got me a +0.2% bonus, WTF does NR cutting lending by 40 bn do?

Edit to say: Sorry Paddles, I see you covered that already. :)

Edited by bobthe~

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  • 293 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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