Banks creating a market crash?

UK007BullDog

Banks are cutting back on staff, they are placed elsewhere as has happened to a friend of mine, who now has left and joined a large brokerage.

One of their tricks is to tell customers that their advisers are sooooo busy. To create the illusion that they are in high demand. Also a lot of the smaller branches have to share an adviser.

I feel so vindicated LOL. Thanks Martin you must have read my mind http://www.moneysavingexpert.com/mortgages/cheaper-life-insurance

Conrad

Lenders are retrenching just as I predicted they would on here a couple of years back when I was offloading some B2L property.

This year is going to be very tough with a lot of brokers leaving the industry.

I'm pleased the idiot lenders are withdrawing from the market. I became irritated with the mortgage press printing statements by competitor lenders along the lines they "welcomed the competition and diversity" - classic sheeple false statements by market participants when yet another sub prime wannabe lender entered the market.

Clients better learn fast that the days of turning a blind eye to bad debts, are over unless they have large deposits and deep pockets.

homer_j_3

Are banks creating a market crash?

Well in short the answer is no because there is no evidence at the moment to say that there will be a crash as such.

There will be a period of correction but homes are not going to be worthless tomorrow but will drop in value which may mean that about 15% of mortgaged households will end up in negative equity due to the high LTV's.

The reverse in market conditions have been due to the credit crunch and the sudden nervousness of the money markets. We have seen that there is going to be a legal challenge on the mis-selling of these investments, which may open the floodgates if successful.

There will be no crash, there will be a correction and this will happen over the next few years until confidence returns. Banks changing lending criteria and cutting back on staff are prudent measures for the shareholders and in particularly the tightening of lending criteria, this is because they want to protect themselves against the unknown of how far and long this correction will take everybody.

As per the arguments of Bank Advisers and Brokers. WHY?

The banks are a business and they will want to provide their customers a service should they want it. Saying that they are wrong because they know that there are other lenders are better for them, then this doesn't really matter aslong as the customer is aware of the scope the bank adviser has.

The whole advice system we have at the moment is overly complex for the consumer. There is little benefit in multi tied and whole of market when you can be whole of market with less products than multi tied.

As a whole of market adviser who has access to any lender that will accept broker business, I believe that multi tied has no benefit to the consumer. All companies that are multi tied are because of the commercial side of negotiating proc fees etc.

The system should be like it was with polarisation. You are either tied or not tied. Over complicating matters does not promote choice to the consumer, only confusion.

So who is responsible for this situation?

The banks? Partly, they should have not been chucking credit and creating products which will now mean 15% of the market will end up in negative equity.

The brokers/advisers? Partly because even with the good ones who would turn business away, there was always someone out there that would do it because they were salespeople above professional advisers.

The public? They also have to shoulder the responsibility. I cannot accept that people only thought that house prices can go up or that they felt that doing 100% or 125% deals over 2 years would not be a risk. They are responsible for making decisions too. A broker/adviser can say do XY&Z but they are not forced to do that.

I can see what is going to happen - the banks, brokers and advisers will all be shot down as contributing to this and we all have to stand up and say that our industry has helped but is not the sole reason for this.

Banks lend and advisers work on the known facts. Can you afford it now - can you afford it at SVR? Are you aware of what a 1% increase will mean - how will you afford it then? It shouldn't matter what the property prices do as all your calculations for affordability should be based on these figures. If you have to move - its like any investment, sell at the wrong time and you will get burnt.

85% of the market will not face negative equity at this stage and will be classed as safe from the corrections as things stand. This to me is not a crash.

Dan_Collins_2

dwsjarcmcd wrote: »

This is just so much tosh on so many levels. Firstly you go on about how brokers need to be paid but then complain about lenders doing the same by selling to achieve targets.

Secondly there may be some trainee branch based advisers who don't have full CeMAP but they are under full supervision and to be a full adviser you do need this qualification.

If lenders pull out of the intermediary market, customers will be forced to go to lenders as they will still need mortgages and it would make them more profit not less. Lenders need brokers as distribution and that's why they exist, due to customer demands and actually the profitabilty of intermediary lending is pretty much the same as branch based lending.

As for protection from brokers yes you are right that brokers are usually better but you can get it cheaper online, so there is always something better

Tosh, I think you shoudl read your post out to a few lenders mate.

Bank staff, more so telephone based, dont give advice. If you go in to the Woolwich looking for a five year fix are they going to tell you to have a look at Abbey???

Idiot!

dwsjarcmcd

Well MATE I always find Advisers who don't know what they're talking about lack credability. Before you call me names check your facts.
Telephone Staff - never mentioned them in any posts, I am aware they are non-advised thanks

Branch Staff DO give advice. It may not be what you recognise as advice but legally and regulatory wise it is. Did I say that a Woolwich adviser would recommend an Abbey product? No I didn't. They have to give ADVICE (oops that word again) from within their own product range. You should just read my post, never mind me reading it to anyone.

Idiot!!

homer_j_3

now now children, play nice or I will take the ball off you.

Griptool

ukwoody wrote: »

Evening all,
As an outsider to the mortage business, but living with a broker, it seems to me personally that with all the banks withdrawing all these LTV ratios and 100+ morts, along with much more stringent borrowing qualifications, that they almost seem to be panicking thus creating a stiffied housing market. All of their own making.

I know here in an area of low income, she is finding it harder and harder to place even relatively simple cases.
What do you guys think?

woody

Woody, the banks have finally realised that lending to bottom feeders is not good business, get used to the "new paradigm".

PS hope your user name is not a reference to your tumescent state, if it is I'll have to sue.

Dan_Collins_2

dwsjarcmcd wrote: »

Well MATE I always find Advisers who don't know what they're talking about lack credability. Before you call me names check your facts.
Telephone Staff - never mentioned them in any posts, I am aware they are non-advised thanks

Branch Staff DO give advice. It may not be what you recognise as advice but legally and regulatory wise it is. Did I say that a Woolwich adviser would recommend an Abbey product? No I didn't. They have to give ADVICE (oops that word again) from within their own product range. You should just read my post, never mind me reading it to anyone.

Idiot!!

Ok I may have been a little harsh, spent a long day trying to put my house back together after the plasterers had been in and the central heating has died!!

Anyway, many branch consultants do not give advice and many do. My branch started to give the client the choice, at the outset you gave them advised or non advised! If they opted for non then you could not give them advice even if they asked again! Strange but true. I would say that you had to have full cemap to do the job, advised or not.

However having been a branch advisor/manager I would say that it would be far more cost affective to have brokers write the business than new staff. I worked for a top 10 building society and I would not say they were very broker fiendly, not compared to others, however the broker side brought in more business than the branch network and the direct channel put together. To have enough staff to drop business from the brokers and carry on doing the same level of business just would not work.

I am not trying to say that I am or would be better than a branch member, other than I now understand my industry and trade far better than I did. I also understand that the branch networks have a far more sales based process. They have high insurance targets and will flog you ASU etc if you need it or not.

Sorry for being a little rude but I found your post a little aggressive and full of tosh.

By the way I dont sell to targets. I get paid for giving very good advice! Ask a branch member what they do?? Targets targets targets! Been there and hated it!

dwsjarcmcd

Dan_Collins wrote: »

Ok I may have been a little harsh, spent a long day trying to put my house back together after the plasterers had been in and the central heating has died!!

Anyway, many branch consultants do not give advice and many do. My branch started to give the client the choice, at the outset you gave them advised or non advised! If they opted for non then you could not give them advice even if they asked again! Strange but true. I would say that you had to have full cemap to do the job, advised or not.

However having been a branch advisor/manager I would say that it would be far more cost affective to have brokers write the business than new staff. I worked for a top 10 building society and I would not say they were very broker fiendly, not compared to others, however the broker side brought in more business than the branch network and the direct channel put together. To have enough staff to drop business from the brokers and carry on doing the same level of business just would not work.

I am not trying to say that I am or would be better than a branch member, other than I now understand my industry and trade far better than I did. I also understand that the branch networks have a far more sales based process. They have high insurance targets and will flog you ASU etc if you need it or not.

Sorry for being a little rude but I found your post a little aggressive and full of tosh.

By the way I dont sell to targets. I get paid for giving very good advice! Ask a branch member what they do?? Targets targets targets! Been there and hated it!

Ok, lets agree to differ and some of what you say about staff and targets is true, no doubt. Times have definately changed since the early post regulation days in lenders, when it was a relief for sales to be non-advised, in some lenders they only do advised sales.

I have also been there, in my time I have been reponsible for intermediary lending and then later running the branch network for a top 10 building society. So I have seen many of the numbers that sit behind the scenes to back up what I say.

I have no axe to grind with brokers/branches/call centre/web because customers choose who and how they want to be dealt with.

David

Dan_Collins_2

dwsjarcmcd wrote: »

Ok, lets agree to differ and some of what you say about staff and targets is true, no doubt. Times have definately changed since the early post regulation days in lenders, when it was a relief for sales to be non-advised, in some lenders they only do advised sales.

I have also been there, in my time I have been reponsible for intermediary lending and then later running the branch network for a top 10 building society. So I have seen many of the numbers that sit behind the scenes to back up what I say.

I have no axe to grind with brokers/branches/call centre/web because customers choose who and how they want to be dealt with.

David

On what you have experienced I am surpriosed that you would say a lender could dropbroker but hey, without opinions life wouldbe dull!!

:beer: