Self-cert " made up nearly half of all the mortgages offered at the peak of the boom"

chucky

Thrugelmir wrote: »

I'm not suggesting it is. But these lenders are representative of where a lot of the self cert lending lies. They are not members of the CML so repossessions and arrears stats are only picked up by the FSA.

Over 6% of self cert mortgages are in arrears well above the industry average.

Over 10% of outstanding mortgages are on a self cert basis. So a significant enough part of the UK mortgage market.

the flip side to this is that Abbey have arrears of around 1.5%. they at a guess have around 30% of the mortgage market.

Nationwide and Halifax have another 30% of the mortgage market their arrears are average for the industry around 2% ish.

that's a much more significant enough part of the UK mortgage market.

Thrugelmir

chucky wrote: »

the flip side to this is that Abbey have arrears of around 1.5%. they at a guess have around 30% of the mortgage market.

Nationwide and Halifax have another 30% of the mortgage market their arrears are average for the industry around 2% ish.

that's a much more significant enough part of the UK mortgage market.

Current market share is irrelevant. What matters is the mortgages that were advanced pre the crash. The problems can't just be waved aside. Until they've been resolved they are of a larger enough scale to be a drag on the wider market.

The market correction is going to be a long slow process.

Here's a list of the main lenders at the peak excluding building societies.

A few relatively unheard of names on this list backed by sizable operations.

Investec/ Kensington Group
Kensington
Infinity
Unity
Money Partners

Bear Stearns
Rooftop

Southern Pacific Mortgage Limited
SPML
London Mortgage Company

Deutsche Bank
Db Mortgages

HBOS
The Mortgage Business
Halifax
Bank of Scotland
BM Solutions
Intelligent Finance

Citigroup
Future Mortgages

Cheshire Mortgage Corporation
Blemain

General Electric Company USA
IGroup
GE Money
First National

Lloyds TSB Group
Cheltenham & Gloucester
Scottish Widows
Lloyds TSB

Santander
Abbey

Barclays Bank PLC
Barclays
Woolwich

Merill Lynch
Wave (Freedom Lending)
Mortgages PLC

The Oakwood Group
Edeus

General Motors
GMAC RFC

Irish Life and Permanent PLC
Capital Homeloans

National Australia Bank
Clydesdale Bank

RBS Group
Royal Bank of Scotland
First Active
Natwest
One Account

Morgan Stanley Group
Advantage

HSBC PLC
First Direct
HSBC

Bradford & Bingley Group
Bradford & Bingley
Mortgage Express

Bank of Ireland Group
Bank of Ireland
Bristol & West

Allied Irish Bank Group
First Trust Bank

Customer Financial Solutions
The Mortgage Lender

International Netherlands Group
ING Direct

Paragon Group of Companies
Paragon Mortgages

Beacon Group
Beacon Homeloans

HAMISH_MCTAVISH

Thrugelmir wrote: »

Over 6% of self cert mortgages are in arrears well above the industry average.

Over 10% of outstanding mortgages are on a self cert basis. So a significant enough part of the UK mortgage market.

I don't think anyone could consider 0.6% of the UK mortgage market significant. At least not when it comes to price pressures.

By your own figures, self cert has resulted in 0.6% of the UK mortgage market going into arrears. It's utterly insignificant in the big picture.

chucky

Thrugelmir wrote: »

Current market share is irrelevant. What matters is the mortgages that were advanced pre the crash. The problems can't just be waved aside. Until they've been resolved they are of a larger enough scale to be a drag on the wider market

Nationwide, Abbey and Halifax are major lenders and own a major market share pre or post crash. they are not irrelevant in the UK mortgage market.

they have 60% of mortgages - that's 6 million mortgages.
they have less than 2% in arrears. that's less than 120,000 people.

by your own figures 0.6% of the self certs are ain arrears. you say they are 10% of the market that's 60,000 people.

i'd worry more about the arrear levels at Abbey, Nationwide and Halifax before i looked at these. the self cert arrears are minor compared to the main stream lenders. pretty obvious really.

Thrugelmir

chucky wrote: »

Nationwide, Abbey and Halifax are major lenders and own a major market share pre or post crash. they are not irrelevant in the UK mortgage market.

they have 60% of mortgages - that's 6 million mortgages.
they have less than 2% in arrears. that's less than 120,000 people.

by your own figures 0.6% of the self certs are ain arrears. you say they are 10% of the market that's 60,000 people.

i'd worry more about the arrear levels at Abbey, Nationwide and Halifax before i looked at these. the self cert arrears are minor compared to the main stream lenders. pretty obvious really.

You may want to check your figures. NR had around 18% of the market in the peak years pre crash.

The Lloyds group is now the largest single lender at around 29%. HSBC must have a good 10% at least as well.

chucky

Thrugelmir wrote: »

You may want to check your figures. NR had around 18% of the market in the peak years pre crash.

The Lloyds group is now the largest single lender at around 29%. HSBC must have a good 10% at least as well.

i did say Halifax though, i know they have 23% of the market but your correction makes my point further because the real issues are not with the arrear levels of these self cert loans but in the wider market where the volume of arrear levels is higher.

Thrugelmir

chucky wrote: »

i did say Halifax though, i know they have 23% of the market but your correction makes my point further because the real issues are not with the arrear levels of these self cert loans but in the wider market where the volume of arrear levels is higher.

Thats debatable. I guess that I read different publications to you.

This period also saw the emergence of specialist, ‘non-bank’ lenders, competing aggressively in the market. Their market share for residential lending (i.e. excluding buy-to-let) increased from 4% in 2000 to a high of approximately 15% in 2008. These non-bank lenders do not have a high-street presence, sell mortgages exclusively through intermediaries, and do not rely on depositors to fund their operations. Instead, they use securitisation and other forms of wholesale funding, such as whole loan book sales, which made it easy for them to enter the UK market and rapidly grow in the upswing – and exit equally easily and rapidly in the downswing

Given the saturation of the mainstream market and the ready availability of cheap funding, the non-banks rapid credit expansion was primarily into new, high-risk consumer segments that previously had only limited access to mortgages.

We also saw the emergence of business models built specifically around consumers with impaired credit histories but with equity in their properties (equity lending).
Sustained house price growth meant there appeared to be less risk of a loss on sale and as a result, the consumer’s propensity to default appeared a less important lending risk to consider. So, the fact that consumers might not be able to repay came to be considered less relevant to these firms. Indeed, they entered the market with the
expectation that a large number of their consumers would not be able to pay and would either have to remortgage or face repossession.

chucky

Thrugelmir wrote: »

Thats debatable. I guess that I read different publications to you.

of course it's debateable and very subjective too because we do not know the quality of the loans for these self-certs, LTV's, employment status etc etc

Pennywise

You also have to "weight" the mortgages according to LTV, length of time to redemption, etc. Just comparing the raw numbers is meaningless. The fact is that self-certs were predominant in the last few years just before the crash - that suggests it was the more active house buyers who were getting mortgages and being prepared to pay unrealistically high prices. How much of Halifax's customer base are those who took out mortgages over 10 years ago and who are still in positive equity and still able to remortgage even at 75% or less with the old salary multipliers - most of whom are sitting pretty - because of that the percentages which look small at first sight may well be a lot more significant - such banks may have a hard-core of borrowers who are suffering massive problems, but the picture looks better because of the vast number of legacy borrowers from before the boom who are very unlikely to be affected.

andykn

Didn't a lot of the self certs require quite high deposits, much more tricky to fake.

So how big are the losses from self cert defaults?