House Prices/Credit Crunch/Recession etc - Article from FT..

[beorhthelm]

A mortgage broker should have ...

i have no idea on numbers but i reckon most buyers dont use a broker. they relied on marketing material from banks, their mates opinion and maybe went as far as to read What Mortgage. They didnt consider "affordable" beyond the cost per month at the time. They didnt care about the SVR, low interest rate are here forever, right?

 

[Uncle Spielberg]

4. if on repayment mortgage change to interest only to lower mortgae payment ( short term measure )

 

[Uncle Spielberg]

i have no idea on numbers but i reckon most buyers dont use a broker. they relied on marketing material from banks, their mates opinion and maybe went as far as to read What Mortgage. They didnt consider "affordable" beyond the cost per month when they took it out. They didnt care about the SVR, low interest rate are here forever, right?

in the last few years 60-70% of all mortgages have been placed through brokers

 

[Uncle Spielberg]

i have no idea on numbers but i reckon most buyers dont use a broker. they relied on marketing material from banks, their mates opinion and maybe went as far as to read What Mortgage. They didnt consider "affordable" beyond the cost per month at the time. They didnt care about the SVR, low interest rate are here forever, right?

they should have spoken to a broker who would have highlighted this

 

[tedebear]

If I remember rightly, in the last housing crash in the late 80,s-early 90,s, it was often the "stupid people" with 100% mortgages, loans etc, that just handed their keys back to the building society, and then "lost" themselves in the system for 3-4 years, only to come back with a clean finance record, to take advantage of the lower prices. Whilst those with 75% mortgages, who lost their jobs thru unemployment, lost all their equity too.
Some of those "stupid people" with 100% mortgages, turned out to be rather astute.

Sorry but you've "lost" me there - how do you hand your keys back to the building society and lose yourself in the system? What exactly does that entail? Where do you live during all this losing?

 

[Uncle Spielberg]

For " lost in the system 2 read mortagge fraud. if you have been repossessed or walked away forget buying for 6 years and any debt accrued they have 12 years to get back of you.

 

[beorhthelm]

in the last few years 60-70% of all mortgages have been placed through brokers

very surprised by that, alot high than i thought from people ive spoken to.

i also wonder what, other than advice, a broker provides. ie how do you get your money? why does all the banks market so heavily direct to consumers if the majority go through brokers?

 

[Uncle Spielberg]

very surprised by that, alot high than i thought from people ive spoken to.

i also wonder what, other than advice, a broker provides. ie how do you get your money? why does all the banks market so heavily direct to consumers if the majority go through brokers?

You are right to an extent, banks and some lenders are aggressively marketing peolle direct and trying to cut the broker out of the loop which is just one of my challenges this year, this is quite a new developement, in the last 10 years the same lenders have been grateful for broker business as it saves them the cost of running branching and paying people to give the advise and write the business.

As a broker I get paid by a lender for placing the businss with them, the client does not pay it, I basically do all the work, do it all on line, do all the admin, chasing up etc so you do not need to take time out to go and see a lender or several lenders and have to chase them up all the time.

 

[REDLAND]

You are right to an extent, banks and some lenders are aggressively marketing peolle direct and trying to cut the broker out of the loop which is just one of my challenges this year, this is quite a new developement, in the last 10 years the same lenders have been grateful for broker business as it saves them the cost of running branching and paying people to give the advise and write the business.

As a broker I get paid by a lender for placing the businss with them, the client does not pay it, I basically do all the work, do it all on line, do all the admin, chasing up etc so you do not need to take time out to go and see a lender or several lenders and have to chase them up all the time.

Gareth, just of the top of your head whats the best 3 year fixed on the market at the moment.. Im having a chat with a college who is soon up for renewal

 

[Uncle Spielberg]

Depends on deposit/equity, Abbey 5.99%.

 

[User removed 4]

the economist where i work is predicting the states will cut before they hike rates again

 

[cjd]

Sorry but you've "lost" me there - how do you hand your keys back to the building society and lose yourself in the system? What exactly does that entail? Where do you live during all this losing?

LOL.......(from at least two couples I knew back in those days) they handed their keys back to the building society, moved to a new address........then moved again etc etc....
When you fill in the forms for finance...(in those days)......you merely say you have lived there for more than 3 years..(and to the best of my knowledge, there was no way of checking back how long people had actually lived there).They never asked for bank statements, national insurance numbers or passports back in the middle 90,s, so it was relatively easy to "lose yourself in the system".There were also such huge numbers of reposessions back in the early 90,s, the task of chasing people became almost impossible. I believe that after this period, the Mortgage Indemnity Insurance evolved to avoid the losses the Building societies faced in future.
With regards to Uncle Speilbergs 12 years etc..........although I dont see the two couples, I,m unaware that they,ve been sent to Guantanamo Bay recently, so as this was 14-15 years ago, I presume they,re safe...LOL..!

 

[Uncle Spielberg]

LOL.......(from at least two couples I knew back in those days) they handed their keys back to the building society, moved to a new address........then moved again etc etc....
When you fill in the forms for finance...(in those days)......you merely say you have lived there for more than 3 years..(and to the best of my knowledge, there was no way of checking back how long people had actually lived there).They never asked for bank statements, national insurance numbers or passports back in the middle 90,s, so it was relatively easy to "lose yourself in the system".There were also such huge numbers of reposessions back in the early 90,s, the task of chasing people became almost impossible. I believe that after this period, the Mortgage Indemnity Insurance evovled to avoid the losses the Building societies faced in future.
With regards to Uncle Speilbergs 12 years etc..........although I dont see the two couples, I,m unaware that they,ve been sent to Guantanamo Bay recently, so as this was 14-15 years ago, I presume they,re safe...LOL..!

Nowadays that will come under the old fashioned phrase " Mortgage Fraud ".

 

[Uncle Spielberg]

With a 7 year prison sentance possible.

 

[User removed 4]

With a 7 year prison sentance possible.

you dont get seven years for murder these days !!

 

[cjd]

With a 7 year prison sentance possible.

In all fairness, do you think all these bank employees, building society employees, finance whizz-kids working on commission, and irresponsible brokers will also face 7 years imprisonment for the ludicrous way they have gone about their business in the last few years.....?

 

[Uncle Spielberg]

you dont get seven years for murder these days !!

Under a new law you can go to prison for 8 months if you are caught changing a cd in your car.

 

[Uncle C]

And its worse still if you do it while you're driving

 

[bhafc99]

Under a new law you can go to prison for 8 months if you are caught changing a cd in your car.

What if it's The Zutons?

 

[terrymendez]

You are right to an extent, banks and some lenders are aggressively marketing peolle direct and trying to cut the broker out of the loop which is just one of my challenges this year, this is quite a new developement, in the last 10 years the same lenders have been grateful for broker business as it saves them the cost of running branching and paying people to give the advise and write the business.

As a broker I get paid by a lender for placing the businss with them, the client does not pay it, I basically do all the work, do it all on line, do all the admin, chasing up etc so you do not need to take time out to go and see a lender or several lenders and have to chase them up all the time.

Present company excluded of course, but I have found that statements like "I can get you a self cert mortgage for however much you want" and "I am getting on well with XXX lender I will see if they will lend you a bit more" type of comments are why people went through brokers.

Hopefully these cowboys who rode the wave will be flushed out, they are to blame for alot of peoples situations at present I would guess.