BoI borrowers will face 1.8% SVR hike
Mortgage Solutions | 07 Nov 2011 | 10:01
Simret Samra
People who are stuck there with nowhere to go due to changes in their circumstance are being exploited by these lenders. This is not in the spirit of TCF but then when have lenders ever given a damn about TCF?
Mark Sutton
08 Nov 2011 | 09:55
………………………..
Mortgage distribution power shifting away from lenders
Mortgage Solutions | 09 Nov 2011 | 08:04
Vicky Hartley
We are entering the next stage in the cycle but we shouldn’t kid ourselves about what our relationship with the bigger lenders is. The long term outlook however is stronger than it has ever been as this is an issue of education and service. As clients get ever more aware of the complexities, they will seek advice in ever larger numbers and our mostly self-employed business models dictate a much higher level of service and a consistency in the relationship that banks could never capture.
Tactics like dual pricing will disappear as our recovery gains pace and the lenders that set the trend towards broker-friendly models first will be the ones that reap the rewards.
Kevin Fowler
09 Nov 2011 | 11:53
AIFA ‘favourably impressed’ by EU approach to regulation
Mortgage Solutions | 09 Nov 2011 | 10:10
Rahul Odedra
I know it’s never popular to give power to Europe, but I can’t help think that since we are ultimately brought in line with their directives anyway, why not scrap the FSA and just adopt it directly from Europe, savings millions in FSA fees?
Mark G
10 Nov 2011 | 10:44
…………………………
BTL regulation will better protect investors, say 30% of brokers
Mortgage Solutions | 10 Nov 2011 | 08:13
Mortgage Solutions
I think David Whittaker is absolutely right. For the professional landlord that has a sizeable portfolio regulation doesn’t have the same benefit and this should be reflected in any proposals. However, the vast majority of the growth in buy to let and the primary focus of the major lenders has not come from professional landlords but the amateur investor with one or maybe two properties. We all know scary stories of naive consumers getting burned by dodgy buy-to-let investment clubs growing portfolios of over developed, under sold new build flats in metropolitan areas.
In these circumstances I can definitely see merit in some form of assistance but it’s not straightforward. Buy to let is essentially an investment decision. It’s not just about finding the right product. So it has previously been suggested that the broker should determine in the first instance whether it is the right investment for their client – that’s investment advice. And a whole new minefield of regulation which I think over-complicates what could be much simpler.
When you get past all of that and look simply at affordability and suitability of the product selection, a broker should be going through a remarkably similar fact finding process to the one they would if they were searching for a residential loan.
So why wouldn’t a similar regulatory measure apply?
With buy to let now the single biggest growth sector, accounting for more business than first-time buyers and largely made up of amateur landlords who may not fully understand what they are getting into, I can certainly see why the regulator would wish to take a look at it in more detail. The key challenge is to keep it simple to ensure it adds value for the people it is intended to protect.
Tim Hague
10 Nov 2011 | 10:47
………………………..
Housing market “needs healthy sub-prime”
Mortgage Solutions | 11 Nov 2011 | 11:47
Simret Samra
Nice sentiments, but I cannot see that happening any time soon. This will remain an unfulfilled pipedream in the current economic climate. The regulators requirements for higher capital ratios by banks effectively kill the chances of any meaningful volume offering from a bank in sub-prime market.
You’ve suggested a rate of 6-7% for 100% lending, no chance. Would you lend your own money at that rate on a high risk long term basis? Not me, and I would certainly not advise anyone else to do so either.
Mark C
11 Nov 2011 | 13:05
…………………………
This week’s star letter comes from Chris Ridgeway who gives us his thoughts on whether or not mortgage distribution power is shifting away from lenders.
Lenders can play any game they choose to achieve distribution. Dual pricing, increasing rates, using in-house advisers and even pretending they love brokers. The sad thing is that we need them to make our living, but I don’t think that is true the other way around. It would be great if lenders would recognise our status post completion and see us an integral part of the continual advice process, just as insurers do.
For us, it is a life and death embrace that we must have with the big lenders; so let’s not kid ourselves. Just as soon as lenders find a better, more efficient and easier way of securing business, we’ll be disregarded.
The question is; how long will this new paradigm last and how can we position our business to survive? My continued view is that the regulator should (but doesn’t) recognise that independence does (and always will) lead to a better outcome for consumers.
If that were not the case large insurers would be employing their own advisers. I think that the FSA is in the arms of the banks, which is the reason why sadly, power shifting away from lenders is an aberration – simply convenience for them now – not by the realisation that this new world is the new order.
Chris Ridgeway
09 Nov 2011 | 08:56
…………………………
Thank you for your comments
From the Mortgage Solutions team
