I have been paying alot of attention to the mortgage and financial press as you would expect, reading with both amusement, hearty agreement and utter despair some of the comments with regards to FSA regulation, self-certification, the behaviour of lenders and brokers, the proposed breakup up of some of our much maligned banking institutions, whilst also watching the pleasing plethora of new rates flooding the market.

There is one overwhelming thing that keeps rearing its head in almost every article I read – criticism. As one of my colleagues here said to me the other day, don’t you think everyone is now a critic? It has become too easy to judge everyone else and criticise their views, opinions and decisions, often vehemently and without thinking.

In the national press and on our TV’s criticism is everywhere, it is the new national obsession. Every weekend we each become expert singers, dancers and ice skaters, shaking our heads and muttering over every slight missed note or crooked arm, not bothering to think how difficult it may be for some kid who has never performed in public before trying to sing a legendary song that most so called “stars” would mime their way through. Oh and by the way, what the hell is she wearing?

This passes through into our industry and spills out into our articles. It almost seems that we have lost the power of empathy, or the art of civilised discussion. It seems too easy to simply comment via criticism.

I am not saying that each of us receiving “constructive” criticism is not a good thing, of course it is when it is done in the right way. Mostly, however, the easy quote is not done that way.

How about the FSA’s new proposals? Mr Boulger in his blog produced a passionate, yet reasoned argument about how the FSA had misunderstood the issues. Yes some of it was incendiary, but some of the comments it produced verged on just plain vindictive. (Before I defend the guru, let me just point out that he is guilty of some of his own unthinking criticism himself which perhaps he should take note of, but I’m an understanding chap! Is that criticism?)

One particular quote mentioned the word “dinosaur” and a few that all those who wanted a self-cert loan were “liars”. Hardly a well-reasoned response. Who else in our industry would spot some of the flaws in the FSA’s work or have the balls for that matter to publically raise it?

As an industry under threat we should be working together, not just taking any opportunity to criticise each other. Personally I believe that fast track should be banned rather than a well-documented self-certification product.

What about lenders? Do they really owe brokers a living? Many of them have supported us well for years and when they need a bit of understanding as they battle for their own survival, just blindly criticising their every move helps no one.

I see a lot of moaning, a lot of blaming instead of looking internally and changing attitudes. I saw the inspirational Paul Merrigan talk the other day, and he recited a famous JFK quote that has never been so apt.

“For time and the world do not stand still. Change is the law of life. And those who look only to the past or the present are certain to miss the future.”

So, to unashamedly quote Fleetwood Mac, (having watched a documentary about them boy they have had their ups and downs, but are still going strong), we should not stop thinking about tomorrow. We need to look to the future and start being positive with each other, remember how to empathise, to argue passionately, but constructively. And, most of all, to remember that it is a singing competition Simon !

In a short space of time we have seen the return of some welcome elements of competition which, together with a fall in the cost of funds, has pushed product rates down. Some lenders, such as a re-invigorated Woolwich, have cut their rates by up to 0.6%, whilst others such as a totally reformed Northern Rock, have made an aggressive play to dominate the Best Buy charts.

Yesterdays darlings of the press, HSBC are no longer alone at the top of the charts, and plagued by tales of woe around levels of service, have been supplanted by a return of the rest of the high street.

Woolwich are a classic example with a cheeky Bank Base Rate Tracker at 1.98% until 31/01/2011, reverting to just 2.99% afterwards at current rates, (3.00% APR). They also have an excellent lifetime tracker product with the added benefits of a flexible Offset priced at 2.97%, (3.10% APR).

Their levels of service have been superb as well with many cases going to offer in just a week.

As far as the much trumpeted return of “the Rock” is concerned, their fixed rates, with uniquely flexible features and competitive fees, have brought some much needed choice back to the market.

Their two year fixed rate at 3.69%, (4.60% APR), is market leading at 70% Loan-To-Value, as is their excellent five year fixed rate product at 4.99%, (4.90% APR).

Whilst this competition is welcome, the other main news this week has been around new FSA regulations which, if introduced as they are, could serve to curtail lenders willingness to lend in certain cases.

Many who are self-employed, freelance or with irregular income sources may find themselves sidelined from the market for a considerable amount of time.

Whilst change and regulation is undoubtedly needed to some degree, a broad brush stroke does not necessarily solve the problem, and whilst on the one hand you have a Government ordering lenders to lend more, they are also making it harder for them to do so.

The good news, certainly in London however, is that the positives far outweigh the negatives for the first time in a long while. Though we should not get carried away on a wave of euphoria that all is well with the world, I still expect a slight dip as some kind of levelling off occurs; cautious optimism is the order of the day.

Whilst the majority of the proposals in themselves are not unexpected, the key will be in their implementation to ensure they benefit not only the industry, but ultimately the consumer.

We all know that there has been a need for a while now to drive out the darker elements and re-professionalise the mortgage industry, especially at a time when more and more people need advice.

It is still too easy for people to walk directly into a bank branch and take out a loan without full independent advice.
The major talking point has been around Self-Certification loans where proof of income is not requested. Putting the onus back onto the lenders and making sure they check affordability seems a sensible move, though in reality the majority of lenders have already addressed this.

It is easy to get carried away with regulation after the horse has bolted, however, and whilst the buzzword is all about “responsible lending”, when used properly through approved brokers, backed up with sensible checks; there can be a place for self-certification.

We should not forget why self-certification was introduced in the first place, in order to help the many self-employed people, or freelancers, with irregular income who can clearly afford the loan but have issues ticking the traditional boxes. Arguably some self-employed customers with established businesses are a “safer” lending prospect than many who work on a pure employed basis, especially at the moment.

However, we all agree the concept was taken too far and became much too prevalent rather than being used as a well adjudicated lending tool. I would hope “fast-track” lending practices will follow suit with a return to good old-fashioned underwriting practices where applicant, broker and underwriter work together.

Ensuring Mortgage Advisors are individually regulated with the FSA, and the regulation of Buy-To-Let Mortgages are also moves that have been expected and ones that I expect most of the broker community to welcome.

There will be many who will say that such regulation will only serve to undermine any positive signs of recovery in the housing market and, in the short-term at least this could be the case.

It is essential that we look after the needs and requirements of 1st Time Buyers, the lifeblood of any full recovery, and the danger is that these changes are a prelude to more controversial policies of product regulation, for example introducing any limit on loan-to-value levels or income multiples. It is these types of changes, which will take away sensible underwriting policies, which could be really damaging.

As it stands, and the industry has until January 2010 to make their comments, sensible changes introduced now could mean that future growth is more sustainable and built on more solid ground.

There are some very interesting observations to be made around some of the comments made.

One question is the recurrence of the old favourite as to whether a discounted rate linked to a lenders own variable rate or a Bank Base linked tracker is better advice. Traditionally most brokers and journalists state it would be better to take a product that tracks the Bank of England Base rate rather than a product linked to the lenders own variable rate. Simple reason really, historically speaking lenders have often failed to pass on the full cuts and increased their own rates over and above the Bank of England’s’ own rise.

However, I did note one comment that raised a very interesting point. That is the fact that the margin between variable rates and Bank Base is much larger than it has been for many a year. The question is therefore is this just the new norm? When rates rise are lenders going to keep increasing their variable rates in line or even by more as they have been known to in the past, or is the margin going to “normalise” as Bank Base rises and lenders not pass on the increases as competitive pressures return to the market?

I guess it depends on your view of lenders, particularly certain lenders, and there are more than a few cynics amongst us who would question whether lenders will look out for their customers or keep raising rates.

For me over the next 2 years at least I still see sense in linking to Bank Base rather than be left at the whim of a lender who may need to increase their rates by more than any modest increases in Bank Base we may see in the short-term.

In the long-term however it does seem more unlikely that certain lenders will be able to keep the gap between Bank Base and their variable rate so large. As ever it is another important thing to take into account when looking at which lender to go for. Headline rate is nice, but it is not the be all and end all for many when they start looking at the nitty gritty.

With the number of products increasing once more, a plethora of products available from different sources and increasingly confusing  internet based “Best Buy” tables that sometimes promote their sponsored products at the top rather than the actual very best products, advice seems more important than ever.

On the insurance side of things we have already seen providers such as Direct Line and Aviva saying their products are not available on internet Best Buy tables, so how long before some lenders follow suit?

In the Large Mortgage Loan sector this is already the case, with most of the best products not available on any search provider. At this end of the market, only an experienced Mortgage Broker can really assist, unless you have the time to contact the many private banks who dip in and out of the market at this level.

Now of course I would say that, but it is true.

It’s good to be back.

Coreco towers was empty yesterday as 15 of us decamped to Derby for the MAB Conference and even with a five am start we still nearly missed the train from St Pancras. The event itself was superbly produced and presented and provided some great insight into what we might expect in 2010 and beyond. We will debrief Monty next week and provide a detailed summary.

Tomorrow of course is the latest Bank of England monetary policy commitee base rate announcement and we will be sending out details as soon as the decision is made at 12 noon. We will be very surprised if there is a change, however if there is it will mean a complete rewrite of our ever popular eNewsletter.

Yesterday we had the news that according to the Halifax, house prices surged 1.6% in September making it the 3rd month running that prices have increased. In contrast Fitch have a pessimistic outlook that UK house prices look set for a further decline in the coming months. It seems to me that no one really knows what is going to happen but rising unemployment will surely have an impact at some stage further down the line.

Note to Monty: Yes we have hijacked your blog, no we have’nt got plans to do it regularly and yes we do miss you. Have a good break.

Normal service will resume when Monty returns from the nudist colony next week.

As far as 3 month LIBOR is concerned this was always the reason that lenders used for not lending during the height of the credit crunch when it was artificially high. Now, according to Moneyfacts, “Three-month Libor is at 0.55 per cent, while the average two-year tracker rate is 3.76 per cent. Two-year swaps, which lenders use to fund fixed-rate mortgages, are at 1.84 per cent, compared with the average two-year fixed-rate deal at 5.13 per cent”.

Now regular readers will know that I understand this is not quite so simple any more, as lenders have to take into account toughening capital adequacy requirements, increasing costs of funds based on perceived risks and the increased costs of attracting savers. In fact there is no doubt that the relationship between LIBOR and funding in its most simplistic sense has changed, perhaps for good like many other economic theories we have seemed to rely on.

However, I still believe there is some leeway and whilst some banks can obtain funds at cheaper rates than others, see the latest HSBC, Abbey and Woolwich products, I am sure more can be done if they really wanted to. In a report last week lack of demand was highlighted for a reduction in lending, but in truth I just do not buy that as demand is not as weak as we are led to believe.

Some positive news on the funding front was the first European securitisation deal for more than a year taking place, with Lloyds issuing an AAA rated mortgage-backed bond equivalent to £4 billion!

As Robert Plehn, head of structured securitisation at Lloyds Banking Group, said “This offer was significantly oversubscribed…we believe we have taken an important step towards helping reopen the European securitisation market.”

This could indeed be a very significant development.

So what of the best and worst mortgage lenders according to Which? In the top 5 for the best we have First Direct, One Account, Coventry, Britannia and the lovely Nationwide. Well done to those with the top 3 all scoring 5 out of 5 for customer service. HSBC as expected did well on rate but scored relatively poorly on customer service and came in 7th out of 17.

So the 3 worst offenders who must try harder? Halifax, Northern Rock and Abbey. In reality only 2000 people were asked and the results were quite close, but it is interesting to see these reports and illustrates to me how using a mortgage broker can help you bypass much of the service issues those going direct tend to experience, as some of those who scored lower on service we do not seem to have an issue with at all.

If this is the case then perhaps that is that how some people can say “I told you so” and show the post they blogged some time ago?

Very interesting and we shall see.

By the way, I reckon Torres will score a hatrick on Saturday!

Whilst HSBC have stolen all the headlines with their 1.99% lowest rate ever malarkey, (actually the lowest rate I remember was 0% for 6 months!),  Woolwich have quietly taken up the fight and slipped in a stepped tracker product starting at 1.98% !

This is all very well, but the battleground for lenders offering these products is below 75% Loan-To-Value, so those struggling to come up with a decent deposit have a right to feel slightly hard done by, and leaves many first-time buyers relying on the “Bank of Mum & Dad” for further assistance.

With lenders still maintaining their “flight to quality”, in other words only really interested in lending to those with large deposits, a perfect credit rating and not even remotely stretching their income, you would be forgiven for thinking that the clouds of gloom over the market are here to stay a while longer.

The good news, however is that in recent weeks there have been tentative signs that things are easing slightly. We have seen reports showing that property has not been this affordable for many years, a marked increase in the number of mortgage products available, and house prices stabilising.

The biggest area of movement is in the large mortgage loan arena where properties seem to be moving quickly and many Private Banks who specialise in lending to High Net Worth individuals have taken up the slack from high street lenders.

At this level products such as a 2.99% base rate tracker, a 3.99% 2 year fixed and a 3.25% variable with no penalties offer a superb incentive for those looking to borrow above £1,000,000 to take advantage of lower house prices and not tie up all their available cash. The good news is that these products have a sensible underwriting policy and very competitive fees.

The increased availability of finance in this area is a welcome boost, and we are already seeing many traditional cash buyers deciding to borrow at historically low rates on at least part of the cost rather than tie up all their cash that could be utilised elsewhere.

There are two other products worth noting. First is that current conditions have brought about a  renaissance for the “Offset Mortgage”, which, starting at 2.97%, is now available for a tiny margin above the leading products, but brings with it a wealth of flexibility and advantages standard tracker products can only dream of.

The fact that offset products are now available at levels not seen since before the credit crunch is yet another sign that mortgage lending is easing, albeit slowly.

In simplistic terms, an Offset Mortgage is a way of using what is in your savings and current accounts to reduce the mortgage balance you are charged interest on. Offsetting like this reduces the amount of interest you need to pay the lender each month. So you can either simply pay less each month, or keep payments the same and pay off your mortgage earlier.

Secondly, there is also a marvellous product priced at Bank of England base rate plus 2.58%, with an arrangement fee of £995. In other words you start off paying a mere 3.08% for 2 years. As well as coming with a free valuation and legal fees for remortgages, the real selling point is the ability to switch into a fixed-rate product at any time without further underwriting or cost.

This really does give you the best of both worlds, and allows you to enjoy the benefits of low rates without the worry that you may not be able to fix when more security is needed or when base rate starts to rise again.

For those that don’t know, according to Wikipedia “Philippe Starck is a French product designer and probably the best known designer in the New Design style. His designs range from spectacular interior designs to mass produced consumer goods such as toothbrushes, chairs, and even houses.”

Anyway, he calls his staff “The Tribe” and implores everyone to look behind the story, ignore the obvious, engage, don’t just sell products nobody needs, think differently. As he himself says, “”You don’t make good design if you think about design. You make good design if you speak about life, sex, flesh, sweat. I shall open ze zip of myself and say ‘Now take what you want’.”

So what has this got to do with anything at all? Has Monty gone off on another of his surreal fantastical ravings? Possibly.

To me the point is that we can all learn from taking a step back and thinking about things differently, in fact I would say we owe it to ourselves to.

Whilst the mortgage industry is hardly rocket science, we all need to reinvent ourselves and stop just thinking “we have to sell”. No. We have to engage our clients, we have to show them things they have not thought about, give them an opportunity to discuss openly with us, feedback and enter into meaningful dialogue.

Just like the quote above about design, you don’t just sell a product by talking about the product. You talk about real life, real needs, and maybe a little touch of sex, flesh and sweat!

People are generally more sophisticated in my book, especially if you are aiming to be a leading mortgage broker in London, you specialise in the large mortgage arena or just want to offer people something different.

Too many companies nowadays still think they can take customers for fools, especially in the financial services arena. With the amount of information around at the moment, lenders spouting that their products are the best since time began, or misleading comparison websites confusing the hell out of people, or even brokers claiming to be the “Uk’s leading independent mortgage advisor” or largest mortgage broker ever, it can be very hard for people to really know not just when they are getting good advice or bad advice, but whether they are really getting any advice at all.

Many brokers say they are the best. They claim to have the best rates, provide the best service and do things no other broker can do. But, instead of saying “we will always get you the best deal on the market” when you can’t, perhaps what people really want is a little honesty, an “anti-claim” or in fact no claim at all.

I like to think that this is what we have done, and I know there are already other good companies out there who do the same thing. That is to try not to make outrageous claims, but just concentrate on the basics.

Professional and genuine independent advice, high levels of service, engaging clients and looking beyond the “sale”.

That way, I suspect that your clients will do the singing and dancing for you, and your own tribe will grow very nicely.