In MI, Duncan Berry of GE Money Home Lending, looks at the growth, evolution and the future of self-certification lending. The conclusion is that self-cert lending is expected to grow at 8.1 per cent per annum until the end of the decade.
HIP happenings
MSL has a feature length article on Home Information Packs (HIPs), which says the anticipated introduction of HIPs in June will change the dynamics of the mortgage market – creating both opportunities and challenges for the mortgage intermediary. Like many new developments, and perhaps understandably, people are reluctant to embrace it before they become better acquainted with the pros and cons. However, this is one initiative where the early intermediary could certainly gain a financial advantage.
Despite concerns, HIPs are definitely going ahead, with no comment in the government’s pre-Budget report stating otherwise. Mortgage intermediaries need to grasp the opportunity to create relationships with estate agents and gain additional commission from HIPs.
Griffiths says:
“I totally agree with the sentiment of early-mover advantage. There is absolutely no point in standing on the sidelines as this particular bandwagon picks up speed. You run the risk of being left behind, only to watch enviously as business relationships with estate agents are established by your competitors.”
In MS, Alan Dring carries on in the same vein, seeing a mad last-minute scramble to get ready for HIPs. According to Dring, selling HIPS will be easy as (HIPs) providers will give brokers everything they need to get the job done.
Non-conforming risk
In FA, Norwich & Peterborough BS warns that cheap near-prime deals will disappear after Basel II legislation comes into place in January 2008. According to chief executive, Matthew Bullock, prime risk will get cheaper and non-conforming risk will become more expensive.
Also in FA, building societies are accused of profiting from non-conforming customers through subsidiary companies that do not offer membership of the society. Steve Williams, head of the building society group for Deloitte, says: “You can end up with societies that have a prime mortgage book with middle class members all sharing the protection and benefits of membership. And yet the same institution will be offering non-conforming business (through its subsidiary) to poorer parts of the community and I am not sure how that equates with the values of a building society.”
Griffiths says:
“The issue in its entirety should consider situations where building societies acquire loan portfolios from other lenders. Leaving to one side the question of whether the owners of the properties in the portfolio are prime, non-conforming, or a combination of the two, is the acquiring society automatically offering these borrowers membership of the society? Somehow I doubt it.”
Publications mentioned
Mortgage Introducer MI 13 Jan
Mortgage Solutions MSL 15 Jan
Mortgage Strategy MS 15 Jan
Financial Adviser FA 18 Jan
