Mortgage Brokers Braced For Halifax To Pull Deals

[Queen of Spades]

What on earth are the volume figures going to show in six months time?

We've seen a near 40% reduction in volumes based on the bad news from the last quarter of 2007, since then there's been even worst news, lenders tightening etc.

Can we expect to see 80% reduction in volume?

That has to cause prices to plummet to similar levels, surely?

If house prices can triple in value over ten or so years then surely the down swing can be equally severe.

The phrase 'the higher they climb the harder they fall' has not been bandied about since 2004-5 because after that the HPI froth on the existing froth was just getting silly.

Remember, a 70% drop brings us back to 2000ish prices. No one was having the screaming abdabs then were they?

[crash2006]

you forget, someone who took out a 100% mortgage 2 years ago, probably needs a 110% mortgage to replace it with.

They'll need 20ish% hard cash.

[Scunnered]

Not long now. ( A dreamy eyed couple sit atop Arthur`s Seat, "Edinburgh will never crash" the man murmers into his lovers ear: Out in the dark blue of the Firth Of Forth the coal black eyes of Godzilla break the surface.)

Excellent!

Perhaps they also feel a rumbling beneath them as the long-extinct volcano slowly begins to reawaken...

[sambino]

What will these guys be selling next week http://www.mortgageadvicebureau.com/

[bobby9983]

This is a quote from an email I received from John Malone, director of Premier Mortgage Services sent to all members of one of the UK's biggest intermediary mortgage clubs;

"For all of us working and advising in the mortgage market, we have now experienced a significant series of events that completely changes how we are and how we will be doing mortgage business in the future.

With this in mind, at a recent conference where the major mortgage distributors were in attendance, we thought it appropriate to convey a message and hopefully a better understanding as to the decisions by the mortgage lenders that are affecting your existing clients and potentially new customers.

Our industry has now experienced an undersupply of very competitive innovative mortgage products in the space of 6 months. We could now be facing the prospect of at least an £80bn - £100bn short fall of funding throughout the full range of product sectors over the next 12 months.

This situation has not only led to lenders no longer providing the major distributors with exclusive products, but the withdrawal of their product range without any reasonable notice to us or you.

Some intermediaries have accused lenders of acting irresponsibly, and under TCF they should be referred to the FSA. This action by the lenders in our opinion does not constitute part of the TCF regime, but more a commercial decision to protect their own liquidity position in keeping with running their business in a commercially sound way.

In fact many of the lenders are now requested by the FSA to report their lending, saving, liquidity position on a daily basis.

Daily cash-flow (DCF) by all lenders is now such a crucial element of their own survival, it does influence their lending policy which impacts on what and how they can lend.

As lenders are now totally reliant on their own deposits for lending, we can play our part by encouraging clients to save more regularly with your chosen institutions.

This immediate action will help to alleviate the existing problem, which hopefully will assist our industry to overcome these lending issues.

No lender wants to disrupt their relationships with the intermediary sector, because we have developed our propositions together so successfully, and built long term relationships.

The above statement may confuse some intermediaries, as some lenders are currently promoting their products more cheaply through their branch network. This we understand is because they can control lending more proficiently with limited funds than via the intermediary sector.

We do understand your concerns and issues with clients as to their understanding of the current situation, hopefully with much more exposure now in the national press, your clients are aware of the current problems facing them when they either remortgages or are obtaining finance to purchase.

Our best guess is that for the remainder of this year and into the first 6 months 2009, the situation will not improve dramatically unless the Bank of England and Government intervene to restore confidence in the wholesale markets, and they have introduced their "quality standards" to encourage the investors back into the mortgage market."

Edited April 2, 2008 by bobby9983

[Scunnered]

Its really funny - all the lemmings flock to the lender at the top of the best-buy table. The lender says "Oh sh1t close the door quick!". The hot potato then passes on to the next lender in the list. Up and down the high street you can hear the sound of bank doors slamming.

It's interesting. We've been sitting here for years predicting the fall of the housing market, but I don't recall anyone coming up with this particular scenario. It's amazing how quickly the lenders have changed their policies, and it seems pretty clear that everyone's going to be forced to follow suit. This shows how a domino effect can very quickly cause big changes in the market: the crash could start to play out really quickly from now on.

[Bloo Loo]

It's interesting. We've been sitting here for years predicting the fall of the housing market, but I don't recall anyone coming up with this particular scenario. It's amazing how quickly the lenders have changed their policies, and it seems pretty clear that everyone's going to be forced to follow suit. This shows how a domino effect can very quickly cause big changes in the market: the crash could start to play out really quickly from now on.

Oh I think it has been predicted. Difficulty in getting credit is as it says on the tin- Credit crunch.

Many professional pundits didnt think it would impinge on the real world till recently though.

[njwd]

Halifax's calculator was still offering me 5x salary yesterday.

[DoctorJ]

Halifax's calculator was still offering me 5x salary yesterday.

[Sledgehead]

This is a quote from an email I received from John Malone, director of Premier Mortgage Services sent to all members of one of the UK's biggest intermediary mortgage clubs;

"For all of us working and advising in the mortgage market, we have now experienced a significant series of events that completely changes how we are and how we will be doing mortgage business in the future.

With this in mind, at a recent conference where the major mortgage distributors were in attendance, we thought it appropriate to convey a message and hopefully a better understanding as to the decisions by the mortgage lenders that are affecting your existing clients and potentially new customers.

Our industry has now experienced an undersupply of very competitive innovative mortgage products in the space of 6 months. We could now be facing the prospect of at least an £80bn - £100bn short fall of funding throughout the full range of product sectors over the next 12 months.

This situation has not only led to lenders no longer providing the major distributors with exclusive products, but the withdrawal of their product range without any reasonable notice to us or you.

Some intermediaries have accused lenders of acting irresponsibly, and under TCF they should be referred to the FSA. This action by the lenders in our opinion does not constitute part of the TCF regime, but more a commercial decision to protect their own liquidity position in keeping with running their business in a commercially sound way.

In fact many of the lenders are now requested by the FSA to report their lending, saving, liquidity position on a daily basis.

Daily cash-flow (DCF) by all lenders is now such a crucial element of their own survival, it does influence their lending policy which impacts on what and how they can lend.

As lenders are now totally reliant on their own deposits for lending, we can play our part by encouraging clients to save more regularly with your chosen institutions.

This immediate action will help to alleviate the existing problem, which hopefully will assist our industry to overcome these lending issues.

No lender wants to disrupt their relationships with the intermediary sector, because we have developed our propositions together so successfully, and built long term relationships.

The above statement may confuse some intermediaries, as some lenders are currently promoting their products more cheaply through their branch network. This we understand is because they can control lending more proficiently with limited funds than via the intermediary sector.

We do understand your concerns and issues with clients as to their understanding of the current situation, hopefully with much more exposure now in the national press, your clients are aware of the current problems facing them when they either remortgages or are obtaining finance to purchase.

Our best guess is that for the remainder of this year and into the first 6 months 2009, the situation will not improve dramatically unless the Bank of England and Government intervene to restore confidence in the wholesale markets, and they have introduced their "quality standards" to encourage the investors back into the mortgage market."

just wow

[Blue Peter]

Our industry has now experienced an undersupply of very competitive innovative mortgage products in the space of 6 months. We could now be facing the prospect of at least an £80bn - £100bn short fall of funding throughout the full range of product sectors over the next 12 months.

Let's say 100 bn short over 12 months.

From the BoE today, I think that the average loan was 144k, so we will lose 100,000,000,00/144,000 mortgages per year....

...roughly 700,000, or just under 58,000 mortgages per month (on average).

Is that correct?

Peter.

Edit: punctuation.

Edited April 2, 2008 by Blue Peter

[R K]

The Great British public are about to discover that just about EVERY fixed rate mortgage they took out was in fact a TEASER/ARM mortgage.

The banks are going to recapitalise by forcing as many people onto the SVR as they can.

I hope no-one with a big mortgage has booked their summer holiday just yet. They might be needing the cash.

[Minos]

The Great British public are about to discover that just about EVERY fixed rate mortgage they took out was in fact a TEASER/ARM mortgage.

The banks are going to recapitalise by forcing as many people onto the SVR as they can.

I hope no-one with a big mortgage has booked their summer holiday just yet. They might be needing the cash.

Do SVRs "generally" drop when the BoE cuts the base rate ? If so, and the BoE drops the base rate could the effects of higher mortgage rates be lessened ?

[Bloo Loo]

snip

I hope no-one with a big mortgage has booked their summer holiday just yet. They might be needing the cash.

A LOT of cash- have you seen the price of the EURO recently?

[Bear Goggles]

The Great British public are about to discover that just about EVERY fixed rate mortgage they took out was in fact a TEASER/ARM mortgage.

The banks are going to recapitalise by forcing as many people onto the SVR as they can.

I hope no-one with a big mortgage has booked their summer holiday just yet. They might be needing the cash.

It's interesting. I've always said. The banks must have SVR mortgages for a reason.

All during the boom, they were seen as a strange product that only people stupid enough not to remortgage would end up on. Now we are seeing the true reason they exist: They are effectively an insurance policy for the banks. When things get bad, they can just push people onto them by refusing to remortgage them onto fixed rates. They are the default mortgage - like you say, the fixed rates were effectively just teasers.

[bobthe~]

From the comments, this EA must have b@lls of steel:

"It's not all doom and gloom, this is a good time to pick up a property bargain. Prices have dropped nearly 5% in our area, making this a good time to buy. And if more people start picking up the bargains it's bound to encourage the market in general and prices will probably start rising again."

Deway, Graves End, UK

Well our very own HonestEA is from Kent, and he paints a different picture, which if you go onto the anecdotals you will see is very grim.

And on SVR: I think some people will find their tracker doesn't always track the BoE base rate, either, as Woolwich tracks the Barclays Base Rate.

I always assumed this was to cater for the times when IRs went down to 1% or something, and it would be a very brave Barclays bank who wants to admit to being in that much trouble when IRs are 5.25% by diverting from Base rate. But the way LIBOR is, you have to wonder how those +0.14% trackers from the summer are going to make any money for Woolwich. Still Bob Diamond is worth his 21 million. He will think of a way.

[Scunnered]

So how long will it be until MORTGAGE CRISIS is the leading story in the newspapers/TV? Next week? The end of the month?

[kilroy]

Do SVRs "generally" drop when the BoE cuts the base rate ? If so, and the BoE drops the base rate could the effects of higher mortgage rates be lessened ?

yes. most SVR are base rate + 200bps or so. This is exactly the reason why Bernanke cut so hard (most US floating mortages are tied to US Libor so he had to bring Libor down). Pain for resets this year has been avoided in the US but a whole bunch reset in 2009 and I don't think there is much more that can be done.

[Timm]

Excellent!

Perhaps they also feel a rumbling beneath them as the long-extinct volcano slowly begins to reawaken...

Next stop: Hunter's Bog.

(It's a local thing)

[dances with sheeple]

Excellent!

Perhaps they also feel a rumbling beneath them as the long-extinct volcano slowly begins to reawaken...

Yes, the lava will soon be running in the streets. There is going to be an almighty clearout of "froth" all the way to the bottom of the cup. I`m starting to worry about the social consequences now, this has gone beyond a "correction" we are seeing the housing market being dismantled as we post. I cannot believe the speed at which things are shaping up now. Certain VI`s have decided it`s time to bring down the curtain, pity the poor sheeple who are going to be squeezed dry.

[uncle_monty]

Apparently the number of mortgages available has dropped by 20% in one week alone.

The British mortgage market is imploding in front of our eyes and with it the housing market.

Remember when the BTL smugly boasted that price dips were an excellent opportunity to "snap up" a bargain.

Further proof that the banks are trying to hold the BOE and NuLab to ransom. "Help us recapitalise or we will take our ball home".

[Ash4781]

This is a quote from an email I received from John Malone, director of Premier Mortgage Services sent to all members of one of the UK's biggest intermediary mortgage clubs;

"For all of us working and advising in the mortgage market, we have now experienced a significant series of events that completely changes how we are and how we will be doing mortgage business in the future.

With this in mind, at a recent conference where the major mortgage distributors were in attendance, we thought it appropriate to convey a message and hopefully a better understanding as to the decisions by the mortgage lenders that are affecting your existing clients and potentially new customers.

Our industry has now experienced an undersupply of very competitive innovative mortgage products in the space of 6 months. We could now be facing the prospect of at least an £80bn - £100bn short fall of funding throughout the full range of product sectors over the next 12 months.

This situation has not only led to lenders no longer providing the major distributors with exclusive products, but the withdrawal of their product range without any reasonable notice to us or you.

Some intermediaries have accused lenders of acting irresponsibly, and under TCF they should be referred to the FSA. This action by the lenders in our opinion does not constitute part of the TCF regime, but more a commercial decision to protect their own liquidity position in keeping with running their business in a commercially sound way.

In fact many of the lenders are now requested by the FSA to report their lending, saving, liquidity position on a daily basis.

Daily cash-flow (DCF) by all lenders is now such a crucial element of their own survival, it does influence their lending policy which impacts on what and how they can lend.

As lenders are now totally reliant on their own deposits for lending, we can play our part by encouraging clients to save more regularly with your chosen institutions.

This immediate action will help to alleviate the existing problem, which hopefully will assist our industry to overcome these lending issues.

No lender wants to disrupt their relationships with the intermediary sector, because we have developed our propositions together so successfully, and built long term relationships.

The above statement may confuse some intermediaries, as some lenders are currently promoting their products more cheaply through their branch network. This we understand is because they can control lending more proficiently with limited funds than via the intermediary sector.

We do understand your concerns and issues with clients as to their understanding of the current situation, hopefully with much more exposure now in the national press, your clients are aware of the current problems facing them when they either remortgages or are obtaining finance to purchase.

Our best guess is that for the remainder of this year and into the first 6 months 2009, the situation will not improve dramatically unless the Bank of England and Government intervene to restore confidence in the wholesale markets, and they have introduced their "quality standards" to encourage the investors back into the mortgage market."

cheers

OMG it's completely collapsing!

Edited April 2, 2008 by Ash4781

[Nicolaj]

We're sailing straight into the eye of the storm.

[dumb-tabloid reader]

Its really funny - all the lemmings flock to the lender at the top of the best-buy table. The lender says "Oh sh1t close the door quick!". The hot potato then passes on to the next lender in the list. Up and down the high street you can hear the sound of bank doors slamming.

why don't we all here help make things worse???

everybody go online and apply for a mortgage with all lenders.

[Bloo Loo]

why don't we all here help make things worse???

everybody go online and apply for a mortgage with all lenders.

then turn THEM down- See how THEY like it

itll really bugger up the BOE aprovals rates and totally bugger up their financial planning