Insights from the UK and beyond
The trade body for the mortgage industry has written to the Chancellor of the Exchequer. In its letter to Alistair Darling, the Council of Mortgage Lenders (CML) outlines the range of steps that lenders are, apparently, taking to minimise problems borrowers may face in the wake of the credit crunch — and help limit the number of property repossessions. Its members have committed to four “significant specific measures”. These are, in the CML’s own words:
* To analyse their existing arrears management policies and implement any changes identified as a result of the industry guidance which we (the CML) are preparing. The guidance will be informed by the feedback we receive from the FSA (Financial Services Authority) on its thematic work on arrears management. We hope the industry guidance will in due course be confirmed by the FSA, but we are at a very early stage of this process.
DAILY MAIL: Father of Four Taken to Court and Fined…Because he Overfilled his Wheelie-Bin by Just Four Inches
Bus driver Gareth Corkhill collected a conviction and a 210 pound fine after he declined to pay a council on-the-spot fine for leaving the lid of his wheelie bin ajar four inches. Story here.
The Bank of England’s 50 billion pound credit swap for banks hit by the global credit crunch leaves a “sour taste ” for the Daily Mail, which accepts it is a necessary evil.
“How could allowing banks to swap their risky mortgage and credit card debts (amassed during years of lunatically-excessive lending) for cast-iron Government bonds be anything else?,” it asks. “So much for moral hazard.”
First Direct has pulled the shutters down on new mortgage business. Albeit a temporary move, it is yet more unsettling news for scores of homeowners coming to the end of cheap deals. Such a move is unprecedented, but perhaps comes as little surprise, given that the lender has been market-leading for quite some time. With pricing more or less 0.5 percent below that of its nearest competitor, the influx of new business that has created a huge backlog is understandable.
The mortgage market is moving at an alarming pace: First Direct’s decision to suspend new borrowing and push business to its parent company, HSBC, is yet another example of lenders taking action to manage volumes. Others have used other means of stemming inflows — increasing rates, withdrawing products and restricting their best rates to lower loan-to-value customers, as the fallout from the credit crunch continues.