Bank of Scotland International selects BancTec Mortgage Origination solution

BancTec Ltd, a leading provider of transaction processing solutions to the banking and financial services marketplace today announced Bank of Scotland International has chosen its eFIRST Origin solution.

The BancTec solution, eFIRST Origin, will allow Bank of Scotland International to optimise the performance of its multi-currency mortgage application processing operations and significantly decrease the time it takes to process mortgage applications. The implementation of eFIRST Origin provides Bank of Scotland International with a fully integrated web-based solution that will manage applications for offshore mortgage products; from customer enquiry all the way to completion and drawdown.

James Gairdner, managing director, Bank of Scotland International said, "We look forward to working closely with BancTec to ensure customers continue to receive the high quality service they have come to expect from Bank of Scotland International."

James Silcock, business development director - EMEA at BancTec said, “We are pleased to have been selected by Bank of Scotland International to provide their next-generation mortgage system. This is the first time eFIRST Origin will be used within a multi-currency loans environment and we are looking forward to working closely with them to ensure all mortgage illustrations will be accurately generated, controlled and documented as part of Bank of Scotland International’s rigorous approach to compliance."

FSA fires out warning to advisers ahead of March TCF deadline

The FSA has sent out a warning to advisers ahead of its March Treating Customers Fairly deadline suggesting a third of firms have not got the correct systems in place to test TCF.

In its newsletter to financial advisers, sent out today, the FSA says between September and December 2007 it carried out visits to 50 adviser firms to review process for giving advice, including management information. A further 50 firms were mystery-shopped.

Although the visits are still being analysed, the FSA says around a third of firms were not actively analysing and using management information they had gathered to review their processes and test whether they were treating their customers fairly.

The newsletter says: “It was disappointing that, in spite of producing some form of MI including Key Performance Indicators, so many firms failed to consider these on an ongoing basis as part of their monitoring of advising practices. In addition many firms did not adequately consider findings from their review of customer files as part of their MI.”

The newsletter also highlights a recent review by the FSA into whether firms are doing enough to ensure appointed reps are treating their customers fairly.

It found a number of issues with the 35 firms who participated including firm’s own written procedures not being followed in practice, too much reliance placed on the remote checking of client files and poor progress with treating customers fairly.

The newsletter says: “Whilst the results for the financial adviser sample were somewhat better than the other sectors, there are over 1,300 ARs conducting business of behalf of small financial adviser firms. Firms need to ensure the ARs they recruit are fit and proper and that their customer facing staff have the necessary knowledge and competence to advise customers.”

Stroud & Swindon opens new contact centre

Stroud & Swindon
has officially opened its new contact centre in
Gloucestershire.

The contact centre
was officially opened by the Mayor of Gloucester Harjit Gill and the welcoming
speech was made by Stroud & Swindon chairman Laurence James. The contact
centre, which will initially house 40 Stroud & Swindon employees, has an
overall capacity of 110.

Fitted with state of
the art telephony systems, Stroud & Swindon claims the centre will offer an
even higher level of customer service.

Stroud & Swindon
contact centre manager Gina Pearce says: “We have been based in Gloucestershire
for over 150 years and it was imperative to us that our new offices remained in
the area, as opposed to moving elsewhere in the UK or even abroad as other
institutions have done.

“Stroud &
Swindon is a committed employer in the local community, and considers
Gloucestershire and the Southwest its heartland. The new contact centre not only
allows us to provide a better service to our customers, it also gives us room
for expansion.”

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Debt consolidation may be anti-TCF

Financial advisers
should think twice before suggesting consolidation to indebted clients, a debt
mangement advisor has warned. TCF Debt Solutions says that unless advisors
include alternatives to consolidation in their advice to clients with debt
problems, such as individual voluntary arrangements or wider debt management
solutions, they may fall foul of the Financial Services Authority's Treating
Customers Fairly regulations.

Andy Moody, chairman
of TCF Debt Solutions, says: “We need to move beyond a consolidation mentality
as advisers.

“Consolidation has
helped many customers but for a lot of clients it can be argued that taking on
more debt is just forestalling an inevitable move into greater problems that can
lead to bankruptcy."

He adds: "The
question will then be whether the intermediary assessed the client correctly at
the outset, and the FSA will expect to see that in keeping with treating
customers fairly the client was fully aware of all the
options.”

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Prime lending is dominant in UK, says IMLA

Prime lending continues to dominate the UK mortgage market, says the Intermediary Mortgage Lenders Association. Despite prevalent fears over sub-prime lending in the US and at home, IMLA says prime and self-cert residential lending remain the majority.

It says this applies to loans generated both via the intermediary sector and direct to consumer.

IMLA says it has collated estimates of 2007 mortgage volumes split between direct and intermediary business. Its research shows specialist lending represents 30% of all lending and that the intermediary sector handles more than 90% of specialist business.

Peter Williams, executive director of IMLA, says: “Specialist, intermediary lenders are often associated with sub-prime, buy-to-let and other forms of specialist lending. “But we mustn’t overlook the fact that significantly more prime business is handled through intermediaries than direct - £140bn for intermediaries compared with £115bn direct.” He adds: “Even so, non-conforming business does represent around 30% of the whole market and as much as 40% of intermediary business.”

Williams believes it is important to recognise that non-conforming lending is not all sub-prime.

IMLA’s research shows the market share of self-cert and sub-prime activity declined slightly last year, while equity release remained a very small proportion of the market at well under 1%.

The association says UK sub-prime lending represents 6% of the market, as opposed to 20% in the US. Williams adds: “Intermediaries handled in excess of £230 billion in 2007, according to our calculations.

“Even in a slower market, based on projections for the size of the market in 2008, they will still be looking at substantial levels of activity in the current year.”

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Peer calls on NR to abolish Together mortgage

A Liberal Democrat
peer has called on the chancellor to ban Northern Rock from offering its 125%
LTV Together mortgage.

In a debate in the
House of Lords, Lord Newby the Liberal Democrat spokesperson for the Treasury
called on Labour peer Bryan Davies, Baron Davies of Oldham to get the chancellor
to abolish the product.

Newby says: “Does
the minister agree that one category of loans doomed to fail from the start is
that where the loan value, from the outset, is significantly greater than the
value of the house?

"Will he therefore,
through the chancellor, instruct the current management of Northern Rock, to
stop offering its Together loan?” Lord Davies replied saying that Northern Rock
is a private company that takes private decisions.

He added:
“Government anxieties about Northern Rock are acute, and it will be important to
take action in the very near future.”

In the same debate
Labour peer Lord Borrie also called on Lord Davies to consider taking criminal
prosecution against those that offer loans to people that are unable to pay them
back.

Borrie says: “Loans
are being given that are doomed form the start because the individuals to whom
they are given have quite inadequate means to pay them back.

"In those most
serious cases, would not the power of deterrence be of great value by the wider
use of criminal prosecution, which could have a great meaning across the board
if some well-publicised cases were brought?”

But Davies responded
by saying that although it was aware of the dangers in this area, particularly
on the sell-and-rent back arrangements, it was tightening up its regulatory
regime of these types of products. A spokeswoman for NR says that it has no
plans to abolish its Together product.

She also disagrees
with the comments made by Lord Newby, adding that the product offers 30% as an
unsecured loan and it is only 95% that is secured against the
property.

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B&B boss confirmed as CML chairman

The Council of
Mortgage Lenders has appointed Steven Crawshaw, group chief executive of
Bradford & Bingley as chairman for 2008.

Crawshaw succeeds
Jon Pain, former managing director of Cheltenham & Gloucester.
Mark Parsons,
managing director of home finance at Barclays and Richard Brown, managing
director of personal lending at Bank of Ireland have been appointed deputy
chairmen. Crawshaw has held his role at B&B since March 2004, and began
his career as a litigation solicitor.

Since joining the
banking sector he has held positions at Cheltenham & Gloucester, Lloyds TSB
and B&B. Crawshaw says: “While the fallout from the liquidity crisis has
been well documented, let’s not forget the strengths of the UK mortgage
marketplace.

“The UK boasts a
competitive and innovative mortgage market which currently helps over 11.8
million households.”
He adds: “Looking
ahead, 2008 will be an uncertain year for the mortgage industry and lenders will
continue to respond to funding constraints. But it is entirely possible that the
market will recover sooner than expected.”

Crawshaw says one of
the CML’s main challenges for the year ahead will be making sense of the
aftermath of the 2007 events and ensuring policymakers and commentators are
accurately informed on the market environment as it evolves.

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First-time buyers face soaring mortgage costs

Average mortgage
costs to income for first-time buyers are now higher than levels at the 1990s
housing boom peak, says the Building Societies Association.

First-time buyers
were devoting nearly 35% of their income to mortgage costs by the third quarter
of 2007, compared with the previous high of nearly 34% in 1990, the UK Housing
Review indicates.

The Review by the
Chartered Institute of Housing and the BSA, published today, shows increasing
numbers of households are moving into private rented housing.

It says a
sharp rise in house prices and mortgage costs over the last decade contrasts
with the pattern of private rents, which have kept pace with earnings.

This has resulted in
substantially lower rents than mortgage costs.

The Review attributes
rapid growth in the private rented sector to competitiveness of private renting,
as opposed to owner-occupation and the greater choice available to households
seeking such housing.

Steve Wilcox, professor of housing policy at the
University of York and author of the review, says: "Private renting has become
far more competitive as an option for households compared to the cost of buying.

"The sector has
grown by 21% in the last five years across the UK and is fulfilling a
significant role in the housing market."

Adrian Coles,
director-general of the BSA, says: "With first-time buyers finding it
increasingly difficult to get a foot on the housing ladder, the private rented
sector is providing good quality accommodation to increasing numbers of people."

www.mortgagestrategy.co.uk

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