Taken 3 - Revenge of the Broker

We were enjoying coffee and catching up on old times. We then looked at the particulars of the property and I was genuinely chuffed that after months of searching, my client had found his ideal home.

Then, his phone rang. I saw my client's face drop mid conversation as it came to light he had just lost the property.

"Whats happened?" I asked.

"They've accepted a higher offer". His face dropped and I felt his pain having been here numerous times before.We continued with our coffee and the disappointment was written all over his face. After two minutes of me assuring him "it wasn't the right place", and that "his REAL home is out there for him" his phone rang again. Whilst I was still debating in my head whether he should have Rianna as his ring tone, his facial expression changed again and so commenced a rather heated conversation.

"Well there are plenty of other period properties in that area so I'll continue my search!" he said rather forcefully.

It seemed the agent had phoned back within the two minutes of previously saying that he had lost the property to a higher offer, to now say that "if he used their "in-house" mortgage broker, he can have it at the lower price he had offered".

Sorry, what? Did you say "if you use their in house mortgage broker you can have it at the lower price?"

WHAT!!!

My face dropped and I felt my own pain, having been here numerous times before. We continued with our coffee and the disappointment was written all over my face. Like the film Taken, it was like someone had been kidnapped. All I could think of was "I don't know who you are. I don't know what you want. If you are looking for a ransom, I can tell you I don't have money. But what I do have are a very particular set of skills; skills I have acquired over a very long career (in mortgages). Skills that make me a nightmare for people like you. If you let my client go now, that'll be the end of it. I will not look for you, i will not pursue you. But if you don't, I will look for you, I WILL find you, and i will kill you".

Okay, so I was never going to kill him, but the fact that someone in this day and age was still using such inappropriate tactics made me incandescent with rage. For years, agents have been repairing their reputations in the industry and such prehistoric tactics I thought were disappearing, but evidently not.

So, rather than embarking on a Liam Neeson revenge mission to claim back my client, who might I point out remained loyal all the way through this process (trust and loyalty Mr Negotiator - something you will never have!) I took it upon myself  to look into the Estate Agents Governing bodies/codes. With the assistance from some of the nice guys still in the industry, I stumbled across a couple of rules and regulations that, as brokers, we should be armed with to aid our clients.

Such as this little beauty from "The Code of Practice for Estate Agents". A particular code that any estate agent with credibility will subscribe to. Pay particular attention to points 7c and to point 8.

://www.tpos.co.uk/downloads/TPOE27-1%20Code%20of%20Practice%20for%20Residential%20Estate%20Agents%20(Effective%20from%201%20August%202011).PDF

Thank you Mr Chris Woods from Penzance who is an AWARD WINNING estate agent. There is a reason why you are award winning.

The above has been filed in my desk for future reference. From speaking with various brokers this is not an uncommon practice and i would urge us all as brokers to fight against this. Sure it effects our well being, but ultimately it is a GROSS misrepresentation to the vendors of the property being sold, and is discriminative against our clients and furthermore, it is forcing clients that are making their biggest investment in their lifetime to either use someone forced upon them, or forfeit their potential new home.

Financial qualification of offers is a completely different matter and to be honest is deemed good practice, but if you come up against this try to renege on quoting Liam Neeson, and quote section 7c of the Code of Conduct for Estate agents which goes like this:

"I don't know who you are. I don't know what you want. If you are looking for a ransom, I can tell you I don't have money. But what I do have are a very particular set of skills; skills I have acquired over a very long career (in mortgages). Skills that make me a nightmare for people like you. If you let my client go now, that'll be the end of it. I will not look for you, i will not pursue you. But if you don't, I will look for you, I WILL find you, and i will kill you".

Ooops wrong quote.

Scream if you want to go faster...

I recently took the family to Disneyland Paris.

What fun we had. There were rides a plenty, thrills around every corner and frequent smiles on our faces. At times there were also tears. If it wasn't my kids, who couldn't comprehend the fact that you do not need to buy a toy in every shop, it was myself wailing at my pathetic attempts to discipline them. There were times when we wondered what the hell we were doing, we questioned our own sanity as we defied gravity and attempted rides that put the fear of god in all those that "enjoyed" them.

One ride in particular, had a drop that left me thankful my four year old son had decided not to partake in. Expletives I have not repeated since my Sunday League Football, continually flooded from my mouth. At the climax of the ride, I couldn't help but think the rush felt familiar. Very familiar. I'd felt these emotions before. 

That was it! I felt these emotions the day before, when a case of mine that had seemed doomed for no justifiable reason at all other than "it had failed the lenders credit score" despite both having 999 on their credit files, was suddenly salvaged. Oh, and the day before that, when a property with several comparables was inexplicably down valued.

In fact, these emotions I had just paid way over the odds for to experience (due to Mickeys cunning stealth taxation - Coke for 7 Euros...I'll give you "oh Boy" ya little...!!) was actually the same emotion I have experienced every day since the credit crunch, for free, at work!

Mortgage broking is a roller coaster. It's a ride full of turns, loop the loops, scares, thrills and adrenalin. For brokers fortunate enough to have hair, the transformation from their perfectly gelled barnets that they proudly exhibit in the morning, to the ruffled messes at close of play, are symbolic of the rides we experience on our daily fun at Broker Park - World of Mortgage Adventures. We have a free entry and enjoy the rides without queueing every day!

Best of all, we know the rides better than anyone. We know the pleasure of Professor Burps Bubble Works (you work out the lender), we also know the fear of Space Mountain and what it is like to be shot at great speed into darkness not knowing where we end up (answers on a postcard...). We also know what it is like to free fall 160ft in the Hollywood Tower of Terror without actually doing so (Anyone?). The pleasure of telling everyone about a great ride, queueing ages for access, only to find that when you get there the ride has been "withdrawn" at the last minute.

For me, I spent a few days talking about the fact it had been 15 years since I had experienced a theme park ride and the emotions that come with it. Looking back, I realise this was nonsense. Every day, I've been on a roller coaster. A ride full of drops (in valuations), speed (of underwriting), queueing (to book funds or get to valuation stage) and frustration (when the you can't get on the ride you want). 

As scary as they can be, we love the thrills of a ride. We'll continue to return to the park and enjoy the rush even though they are knocking years off our lives. Right now, there are more rides than we have seen for a long time and as much as we all complain, we love the experience.

Buckle up!

Opportunity Knocks for Estate Agents/Brokers/First Time Buyers

It's been quite a repetitive story over the last two years.

"Business has been good, but we just don't have enough stock!"

"Vendors are lacking a confidence to bring their property to market. They just don't feel there is a big enough demand for it given the "current lending proposition" from lenders.

"If only we could do something to stimulate the first time buyers!"

These are just a selection of comments mortgage brokers have become accustomed to hearing from estate agents all over the country in the last few years. As it became harder to obtain finance for first time buyers due to higher interest rates and lower income multiples, the property market stagnated somewhat. Chains could not get established, missing vital links to complete them. Finding a first time buyer or second stepper was as tough a task as a finding a new computer without Windows 8 (don't get me started on windows 8).

However, recent price wars fuelled by the Funding for Lending Scheme, have seen a significant reduction in interest rates at higher loan to values. 90% borrowing currently demonstrates rates at considerably less than they were 2 years ago. Competition from some of the bigger lenders, and a cheap availability of funds, has seen First Time Buyers return to the market. It has also demonstrated to some, that second steppers now have the ability to move property again. In our first quarter of 2013 we have seen more First Time Buyers during this period since pre credit crunch.

There has been a role reversal in the sales process. Gone are the days when clients would "go shopping" for a property, find the place of their dreams and simply offer knowing that the mortgage placement was mere formality. The complexities of the market have educated the public a lot more and the first step is now to visit the broker first, obtain a decision in principle and a generic idea of borrowing and then, once this has been established, the buyer goes out to the market to see what is available. The knock on effect here, is that brokers see the public first, position a maximum borrowing from lenders, and then they commence the "shop". This means that buyers are more educated on their budgets, know in general what they can afford, and also know that "in principle" they are good to proceed with a lender, speeding up the process and bringing back a solid first time buyer to the chains whilst also ensuring there is a confidence with the vendor and agent that the purchaser is "solid".

The reduction of rates at higher loan to values has resulted in many brokers seeing a lot more of these clientele and it would be safe to assume that agents will soon be the beneficiary of an influx of first time buyers/second steppers ready to "get active" in the market again. Logic suggests that as demand starts to outweigh supply, the only thing that can happen to price - is it will raise. Whilst this is basic economics - the concept of demand and supply is never more prevalent than in the the property market and Dr Poole will be encouraged to see me applying this to my trade (Economics, Class of 92, never forget).

There are many other external factors of course that effect this market but right now, as a broker I am encouraged, and as confidence returns to our purchasers, it will also return to our vendors, so estate agents should share our optimism. Demand, in my eyes will increase this year as availability of funds at respectable/affordable rates across all loan to values looks set to increase.

Optimism should be returning to the market with this assistance of the Funding For Lending Scheme and coupled with the house prices increment of 5.2% from February 2012 to February 2013 recently announced, estate agents and brokers look set for one of the busiest years since the crunch. As broker confidence in first time buyers and second steppers has undoubtedly increased, so too should the expectation from agents that the market will soon see an influx of buyers not witnessed for some time.

Sealed bids could soon be back with a vengeance...

Opportunity Knocks for Estate Agents & Brokers

It's been quite a repetitive story over the last two years. 

"Business has been good, but we just don't have enough stock!"

"Vendors are lacking a confidence to bring their property to market. They just don't feel there is a big enough demand for it given the "current lending proposition" from lenders.

"If only we could do something to stimulate the first time buyers!"

These are just a selection of comments mortgage brokers have become accustomed to hearing from estate agents all over the country in the last few years. As it became harder to obtain finance for first time buyers due to higher interest rates and lower income multiples, the property market stagnated somewhat. Chains could not get established, missing vital links to complete them. Finding a first time buyer or second stepper was as tough a task as a finding a new computer without Windows 8 (don't get me started on windows 8).

However, recent price wars fuelled by the Funding for Lending Scheme, have seen a significant reduction in interest rates at higher loan to values.  90% borrowing currently demonstrates rates at considerably less than they were 2 years ago. Competition from some of the bigger lenders, and a cheap availability of funds, has seen First Time Buyers return to the market. It has also demonstrated to some, that second steppers now have the ability to move property again. In our first quarter of 2013 we have seen more First Time Buyers during this period since pre credit crunch.

There has been a role reversal in the sales process. Gone are the days when clients would "go shopping" for a property, find the place of their dreams and simply offer knowing that the mortgage placement was mere formality. The complexities of the market have educated the public a lot more and the first step is now to visit the broker first, obtain a decision in principle and a generic idea of borrowing and then, once this has been established, the buyer goes out to the market to see what is available. The knock on effect here, is that brokers see the public first, position a maximum borrowing from lenders, and then they commence the "shop". This means that buyers are more educated on their budgets, know in general what they can afford, and also know that "in principle" they are good to proceed with a lender, speeding up the process and bringing back a solid first time buyer to the chains whilst also ensuring there is a confidence with the vendor and agent that the purchaser is "solid".

The reduction of rates at higher loan to values has resulted in many brokers seeing a lot more of these clientele and it would be safe to assume that agents will soon be the beneficiary of an influx of first time buyers/second steppers ready to "get active" in the market again. Logic suggests that as demand starts to outweigh supply, the only thing that can happen to price - is it will raise. Whilst this is basic economics - the concept of demand and supply is never more prevalent than in the the property market and Dr Poole will be encouraged to see me applying this to my trade (Economics, Class of 92, never forget).

There are many other external factors of course that effect this market but right now, as a broker I am encouraged, and as confidence returns to our purchasers, it will also return to our vendors, so estate agents should share our optimism. Demand, in my eyes will increase this year as availability of funds at respectable/affordable rates across all loan to values looks set to increase.

Optimism should be returning to the market with this assistance of the Funding For Lending Scheme and coupled with the house prices increment of 5.2% from February 2012 to February 2013 recently announced, estate agents and brokers look set for one of the busiest years since the crunch. As broker confidence in first time buyers and second steppers has undoubtedly increased, so too should the expectation from agents that the market will soon see an influx of buyers not witnessed for some time.

Sealed bids could soon be back with a vengeance...

 

Now is the winter of our Discontent...

Now is the winter of our discontent
Made glorious summer by this funds for lending;
And all the clouds that low'r'd upon our house
In the deep bosom of the ocean buried.

Happy New year one and all. 

Its not just old tv shows and films we blog about here you know! Richard III, one of Shakespears greatest plays, opens with the above (minus the cunning insert) and I see nothing more fitting that this to sum up the market at present. Many quote this when expressing displeasure, but Bigus Dickus (Richard III) spoke it with satisfaction and content as he was so happy with the peace that fell upon England after a long civil war between the Royal family of York and and of the royal family of Lancaster (that's the end of today's history lesson...class dismissed). I'm happy with the state of the market at present, and i would suggest many mortgage brokers over the UK are as well on the strength of how busy we all seem to be.

The New Year has started very much where it left off, with a host of market commentators asking if the Funding For Lending Scheme is working. I'd like to point out that we still have in effect a year of this scheme to run so it is a little early to evaluate, but i'd urge everyone to look at its merits before berating it as a failure. We will be better served to cast judgement on its success in January 2014, but lets make no bones about it, the availability of cheap funding to lenders has given us brokers some fantastic products at our disposal, even if these savings have not filtered through as significantly as expected to the smaller businesses, it is early days. 

Like Usain Bolt out of the blocks, Clydesdale have launched the new year with great innovation and logic by launching the 80% pure interest only deal. I love it. Its innovation and logical lending that we have been crying out for since "interest only" was first labelled taboo in the industry. Clydesdale we salute you. And when backed up with their underwriting capabilities, they are going to prove strong contenders for "Lender of the year" in 2013 in my opinion. I say this not just because of the brilliance they showed on a case of mine over Xmas (it did help though), but after hearing non stop praise regarding them as a lender from a number of brokers. 

Woolwich have dared to believe as well. Their Family Springboard mortgage looks to lend at 95% albeit with assistance from the family, but lets be honest, most of our first time buyer clients of the past made a swift withdrawal from the bank of Mum and Dad before proceeding anyway, so there is little difference between then and now. The only difference is that Mum and Dad get their gift back PLUS interest after 3 years. Genius. This helps second steppers too and should have a positive step for the property market as a whole as well as the mortgage industry. Welcome back First Time buyers, and bonjour to you too second steppers. Its game on!!

Lenders are doing all they can to support us. Innovation is returning to the market and so too is logic, not to mentioned yet another 10 day sale from Accord (these sales are occuring almost as frequently as a Next sale, but no need to start queuing at 3am folks!) Sure its not 2006 but we are taking steps in the right direction and it would be nice if we all acknowledged that, rather than trying to find flaws in lenders, government schemes, lenders criteria changes. Lets start 2013 as we mean to go on, stop the damn berating, stop the moaning and whinging and appreciate what we have.

Back to Big Dick III, he was happy with the peace that fell upon England first of all. Then it all went pear shaped as he tried to kill everyone with ridiculous and callous ambition. With house sales at their highest levels for 5 years, something is clearly working! I can only see these stats getting better, so lets not get greedy, lets not get over ambitious. Lenders faith is slowly being restored and they are slowly starting to edge up higher loan to value lending at cheaper rates. As the benefits of the Funding For Lending scheme start to trickle in, lets stop the damn whinging guys or before you know it...

"The World is grown so bad, that wrens make prey where eagles dare not perch" Richard III, Act One,,Scene 3.


.

If Dallas can return, so can we.

Its been a while since my last blog. Writers block, a crazy mortgage market, kids teething, washing my hair - the reasons are numerous. However, inspiration came my way when I sat down to enjoy the return of one of the greatest TV programs of our time - Dallas. Okay slight exaggeration. Maybe it can't claim that accolade, but it can claim the greatest set of eyebrows ever seen on TV. Larry Hagman, aka JR Ewing has returned with two co actors (eyebrow number one and eyebrow number two) and is back on our screens. Something about JR's scheming, Bobby Ewing still whispering every sentence, and Sue Ellen having had so many face lifts her eyes are almost on the back of her head, has motivated me to come out and get blogging again.



 

Perhaps it is the flash cars, the sight of Southfork, or the tone of green I seem to turn whenever I watch the program. Perhaps it is the tall sky scrapers in the opening sequence, or the site of the horses running wild around one of the biggest areas of land ever owned by man that makes me think, you know what; money is out there! You just need to find it.

 

Well lenders certainly seemed to have found it. The rates we have seen of late are simply sublime! NatWest went truly crazy leading the way with their five year fixed deal and even after repricing, are still head and shoulders above everyone else. Halifax got stuck in with a fantastic 90% range for 7 year fixed deals. Lenders seem to be having a go. Perhaps it was Tescogate that triggered this? The emergence of one of the most feared brands in the land now evident in our sector must have made many stand up and take notice. Whilst their initial offering was quite conservative, it didn't take long for them get a little more aggressive.

 

News today that Precise are also joining the prime market with some fairly attractive deals means that price wars are rife and consumers can start saving a few pennies to invest in larger tvs to truly appreciate the splendour of JRs eyebrows. In HD they really are something. If you look hard enough you can even see them blowing in the wind as free as a middle aged man driving a red MG Midget in a country lane after a successful visit to Belgravia Hairloss Centre.

 

SVR Hikes continue to hit our market. So, as SVRs go up, long term funds go down, and economic uncertainty remains, why are we not pushing the remortgage market more than ever? We have read the reports, lenders are mostly below their targets. The funding for lending scheme is working and we are approaching Quarter 4 with more opportunity than we have seen for a while. We win. Our clients win. WE ALL WIN!

 

So, JR is back. Cowboy boots are fashionable again. Get your spurs on, get your belt buckles enlarged enough so that you can receive a signal for sky sports on them, and lets give it a final push for the final quarter folks. If JR can come back, so can we.

 

TRUMPETS PLEASE...

 

Ba baaaaaaaa ba baaaaaaaaaaa ba baaaa da da daaa daaaa...

Can we fix it? Yes, WE CAN!

Bob the Builder is one shrewd cookie. He has been in the construction industry since 1997 and his business has gone from strength to strength. He is multi lingual, and works all over the world and has gone about his business, building his company while other construction companies struggled for funding during the credit crunch. Oh, and his diggers talk.

Wow. What a guy.

Sure, most of his work is in the local community but he keeps employment up in his local areas, never really imports his materials and keeps his petrol costs down by only doing local work. A sound business model.

Is he concerned about the impact of GREXIT? Well, in a recent interview, I asked him about his views on interest rates and Bob said this:

"Can we fix it?"

And I said "Yes, we can".

The man should be prime minister. He really knows what he is talking about. Whilst having a pint together, I discussed with Bob that the pending exit of Greece from the Euro's could make the availability of funds harder for lenders and this would drive up the cost of borrowing. So, with lenders this week cutting their fixed rates, Bob was all over it like a teenage girl at SoccerAid.

Many of the "big boys" have reduced their fixed mortgage rates, and Nationwide have even slashed their arrangement fee by 50% on their five year deals as well, making these options appear all the more tempting. Much pressure has been placed on the Bank of England to cut the Base rate yet again if the Eurozone starts to break apart, but a reduction in the base rate would not necessarily mean that the cost of borrowing would reduce. It would suit people sitting on trackers right now, those that have the smaller margins above base on deals from the past, but the pricing of new deals would simply absorb this reduction and I would suspect we will see variable and tracker products become more expensive. 

"So, can we fix it?"

Yes Bob we can, keep your hard hat on. There are some competitive deals out there right now and it would be a good time to assess your options, especially if you have been sitting on your lenders Standard Variable Rates thinking that it will see you through the tough times.

So, once again mortgage brokers should be actively working the market. Working hard for their clients to get them ready for the turbulence that lies ahead. The captain has asked us to put our seatbelts on, and whilst I am not quite sitting with my life jacket on as well, I expect a rough ride. Fixed rates are starting to make sense again, with an uncertain future to the economy, and rates appearing cheaper, its time to review.

So, another pint Bob? Oh...no, the pump has broken.

"Can we fix it?"

Most probably Bob, most probably.