This news comes just weeks after the FSA stated that they would be looking to ban self cert mortgage products.

This news is no doubt going to come as a massive blow to the self employed business community who have ordinarily not been able to fit into the prescribed boxes that mortgage lenders have imposed. It is however, hoped that once the Financial Services Authority issue guidance that mortgage lenders will be able to tailor specific products to the self employed business community.

We all wait to see how the mortgage market will cater for the self employed business person.

Richard Fleming, Mick McLoughlin and Ian Corfield of KPMG have been appointed joint administrators to First Quench. KPMG said 81 redundancies had been made at the firm’s head office in Welwyn Garden City, and warned that more jobs were likely to go.

First Quench has 1,202 stores under its various brand names, and employs 6,283 workers.

Between 31 October 2004 and 30 November 2008, a number of serious failings by GMAC-RFC were identified in relation to its dealings with customers experiencing arrears and repossessions. 

These included excessive and unfair charges for customers that did not reflect administration costs, proposing repayment plans that did not always consider a customer’s individual circumstances and inadequate training of mortgage servicing staff in handling of arrears and repossessions.

The lender was also issuing repossession proceedings before fully considering all the alternatives.

The case sets a precedent, with the FSA concluding this investigation in a matter of weeks, and the firm working with the FSA to agree a process to enable customers to receive redress as quickly as possible.

As a result of early settlement, the firm qualified for a 30% discount under the FSA’s settlement discount scheme.  Without the discount the fine would have been £4m.

The FSA announced in June that four firms had been referred to enforcement for investigation and several more firms were being assessed for referral.

In many cases the FSA found a high incidence of mortgages moving straight into arrears and potential breaches of responsible lending rules.

Margaret Cole, director of enforcement and financial crime, says: “This case shows credible deterrence in action.  It is an excellent example of what the FSA’s more intrusive approach can achieve for consumers, and it reflects what we said in our Mortgage Market Review last week about unfair mortgage arrears charges.  Mortgage lenders and third party administrators should read this final notice and the Mortgage Market Review and take action in the interests of their customers.”

Alan Cleary, managing director of Exact, says that the scale of the fine shows that the spotlight is firmly on third party administrators and lenders, and the FSA has shown that it means business.

He says: “All mortgage servicers will need to have the very best, most up-to-date arrears handling processes to demonstrate they are treating their customers fairly and not rushing them to court.”

A spokesperson for GMAC-RFC says: “We want to apologise to customers affected.  We have worked openly with the FSA to review and revise our procedures for managing accounts in arrears.

“We’ve been able to work quickly as a result of cooperation with the FSA and changes already made to our procedures and training programmes over the last eighteen months.  Furthermore, we have established a customer contact and redress programme in relation to certain arrears charges.    

“Whilst our arrears charges were in line with the market, in hindsight, we fully accept that for certain fees our estimates of the costs were not proportionate to the additional administration actually required. We will be writing to customers who incurred these specific charges when in arrears and will re-credit the charges plus interest.”

Details of fees to be redressed include:

• Charges for non payment of the monthly mortgage payment by Direct Debit when in arrears (average refund £117)
• Early Repayment Charges applied to arrears fees and charges (average refund £14)
• Part of the solicitors instruction fee which was more than the actual cost  (average refund £45)

The company will be sending a letter with details of the redress programme to any customer with a mortgage in arrears who was charged one of the above fees since 1 November 2004. Following this communication, existing customers of GMAC-RFC will receive an automatic re-crediting of the charges plus interest to their mortgage account.

For past customers who were in arrears and have already redeemed their mortgage with GMAC-RFC, the company will send a letter to the last known address to arrange a refund.

source: mortgagestrategy.co.uk

Asset Based Factoring is designed to maximise the level of finance available to a business against the value of its assets. Sometimes described as “collateralised lending”, Asset Based Lending delivers a senior debt injection that provides working capital, helps with growth and can enable a business to re-structure. Security is taken against assets hence the term “lending”.

The amount available under an Asset Based Factoring arrangement is based on the combined assets of a business, naturally this can be tailored to the individual, so your specific business may only want to fund sales ledger and or its plant and equipment.

Here are a few examples of security used as part of Assets Based Factoring deals

• Current Assets -  accounts receivable or debtor ledger and stock inventory
• Fixed Assets – such as property, commercial vehicles,  plant & machinery
• Intangible Assets – these may include brand names, patents and trademarks

The Company Borrowing the money draws on a line of credit based on their assets. Taking an overdraft facility from a bank or securing a loan does not always meet the long-term requirements of a growing or restructuring business. Asset Based Lenders look beyond financial statements to determine advances and frequently provide funds where traditional sources are not available

What Can Asset Based Factoring Be Used For:

• Business Refinance
• Corporate Restructure
• Growth & Sales Funding
• Business Turnaround & Rescue
• Mergers & Acquisitions
• Management Buy Outs (MBO)

If you would like to know more about asset based factoring or more importantly how asset based factoring could help your Company please do not hesitate to call Phillip Evans direct on 0797 0500425

How to Apply For Asset Based Factoring

Firstly Enable Finance offer all our clients a free and with no obligation consultation either over the phone or in person to suit you so that we fully understand your business, business goals and ultimately what you are trying to achieve.

Click here to obtain an Asset Based Factoring Quote.

R3 is calling for the Insolvency Service to be allocated greater resources to pursue more cases referred to them by Insolvency Practitioners (IPs). Last year, out of the 4,752 referrals by IPs, the Insolvency Service disqualified 1,252 directors, or about 26%. Six years ago 45% of directors were disqualified.

“One in four reports resulting in a disqualification is simply not a high enough strike rate,” says R3 President Peter Sargent. “Insolvency Practitioners are required by law to report on the conduct of the directors of all businesses when they fail. A particular type of report is required when the conduct of the director appears to the IP to warrant further investigation. The Service does a good job to get the disqualifications it secures but clearly needs additional resources to pursue more cases.”

Under the Directors Disqualification Act, the Insolvency Service can seek a court order for a director to be barred from taking boardroom posts. Most commonly this is for trading when insolvent and the average disqualification period is six and a half years. R3 has been discussing with Parliamentarians and key stakeholders how best to prevent directors making the same mistakes next time round.

Peter Sargent concludes: “We have urged both Government and the opposition to consider introducing compulsory education for disqualified directors. Using a driving analogy, those caught speeding are encouraged to undertake a speed awareness course. Greater publicity for cases the Insolvency Service successfully prosecutes could also act as an additional deterrent, as well as more resources to police those who have been disqualified. Otherwise some ‘dodgy’ directors will simply slip through the net and be allowed to set up shop somewhere else.

Click Here and Take Immediate Action before you find yourself as a Disqualified Director

If run a construction company or are involved in the construction sector the chances are you are working under some form of JCT contract, issuing payment requests and or your invoices being subject to retention(s). Operating in this environment can sometimes create cash flow issue that with the right kind of funding partner would be immediately resolved… That where Enable Finance can help

We’re here to help fund your business.

Who we support:

• Small and Medium Sized Construction Companies (Limited, Sole Traders or Partnerships).
• Trading within the commercial, local authority or government sectors.
• Turnover around £200k – £10m per annum.
• Funding requirements of between £25K and £2.5m
• Operating as a sub &/or main contractor under contracts and/or orders

Our fast track Invoice Factoring facility offers:

• Recourse or Non Recourse, with or without bad debt protection, or Selective Invoices (non recourse)
• Disclosed Invoice Factoring or Confidential Invoice Discounting
• A Specialist Bad Debt Protection policy which covers contractual debt
• Up to 70% Net Invoice Advance Rate
• Flexible funding against contract receivables including applications for payment
• Complimentary to, or replacing existing banking facilities
• Dedicated specialist construction management unit
• Internal Quantity Surveyor Resource

Businesses we have provided Invoice Factoring Facilities for in the Construction Industry

• Refurbishment Contractor
• Construction Firm Main Contractor
• Ground & Earthwork Contractor
• Painting & Decorating Contractor with financial difficulties and in CVA
• Plastering Contractor
• Civil Engineering Contractor
  

To Discuss your Construction Finance Needs and Obtain Risk Free Quotes Click here

The CML created the comments as part of its submission to the Money Services Authority ahead of the publication of its Mortgage Market Review – expected next week.

But the CML says it considers self-cert a legitimate niche product for those that have irregular income or cannot verify their income from employment.

It says a ban on the merchandise would mean lenders would not be ready to fast-track cases for borrowers where income verification is simply not always undertaken, even when the applicant may give proof of income.

It will believe however there are sensible concerns for lenders to consider when verifying income, like how a lender may really verify income without access to a powerful knowledge set.

The modern issues stem not from a failure of the mortgage rulebook, or from widespread credit problems during a recession, but essentially from past approaches to supervision of the principles and an over-supply of cash to lend out. Currently the pendulum has swung and the difficulty is the lack of available mortgage finance. Regulatory intervention on mortgages is unlikely to reverse this trend plus can accentuate the problem

The initiative will be part of the FSA’s keenly awaited mortgage review, set to be published which early next week, according to an exclusive in The Times.

The sweeping report is also targeting buy to let mortgages, which could be regulated for the first time, said the paper.

Self-cert mortgages, also dubbed liar loans, Self-certification mortgages accounted for one third of new loans in 2007, or about GBP 100 billion of the GBP300 billion loans granted that year. Buy-to-let accounted for 12 per cent of all properties, or more than three million homes in the same year.

But new loans in both sectors plunged to almost zero in the past year as lenders have deserted the riskier parts of the housing market.

Self-cert loans have been one of the fastest-growing parts of the mortgage market in recent years. They were mainly targeted at the self-employed or those with mulitple income streams who find it tough to prove their irregular income streams.

Unlike standard mortgages, for which customers must provide pay slips and other documents proving salary and expenditure, self-cert loans require far fewer documents and rely more on customers’ declarations that they can meet their repayments.

However, in the donwturn defaults on self cert mortgages have been at much higher rates than the industry average.

HBOS and Bradford & Bingley were among the biggest self-cert lenders. HBOS was sold to Lloyds TSB in a rescue deal in September last year and B&B collapsed and had to be partially nationalised.

The FSA is also considering regulating buy-to-let loans for the first time. That could require professional landlords, who may have portfolios of 500 properties, to fill in the same forms that individual homeowners have to complete. Such a move would be inappropriate, experts assert, and could further stifle buy-to-let lending, which has also nose-dived in the past 12 months.

The bad credit may have been registered to your Limited Company or you the Owner / Director. While the commercial mortgages are available on a non status basis commercial mortgages are assed individually on there own merits.

Bad Credit Commercial Mortgage – Product Overview

Loan Sizes: min £50,000.00 Max £250,000.00 with loans in the region of £100,000 to £200,000 being reviewed favourably

Loan to values: up to 60% of the 180 day market value of the property but taking account of the 90 day value

Property types / Acceptable Lending security

Examples: residential, retail, offices, warehouses, factories, garages, care homes, cafés and restaurants,

Limited priority on: farms/farm land, hotels, public houses (including working men’s clubs)

Exclusions: development (including development land), nightclubs, petrol stations, waste transfer sites, fish farms, caravan sites, golf clubs, commercial leasehold security and any other property which may be viewed upon as “exotic or extreme”

Location: Exclusions in more isolated rural areas (non applicable to farms/farm land)

Tenure: freehold only on commercial security, with min 125 years on residential leasehold security

For more information on commercial mortgages and how Enable Finance Ltd can help your business contact one of our Commercial Finance Advisor or why not apply on line for a Risk Free commercial mortgage quote.

Click here for a RISK FREE Commercial Mortgage Quote