----< Specialist mortgage lenders give bad deals >--------------------
So says the Sunday Times. It claims brokers are paid up to [pounds]2,500 to advise self-employed and "non-status" borrowers (that's you and me for the repossessees who are reading this) to go with lenders that charge high interest rates.

That's not news, of course, but the point the Sunday Times is really making is that many of the borrowers could have got cheaper mortgages from High Street lenders. Among the specialist lenders it names are Ocwen, Paragon, Kensington Mortgage Company, Southern Pacific and Birmingham Mortgage Corporation. It singles out Birmingham Mortgage Corporation for charging interest that is twice as high as High Street lenders'.

It also says the Office of Fair Trading is looking for evidence of mis-selling but quotes an OFT spokesman who claimed it is to the Treasury to do something about it.

Uh-oh. In that case, we have a problem. You see, the Treasury is quite pally with some of the companies that the Sunday Times names. "Quite pally" in the sense that the Treasury - aka the Bank of England - is keen to help some of these lenders raise even more money. Don't believe us? Then have a look at these links:

Bank of England capital issues for Paragon and Ocwen:
http://www.bankofengland.co.uk/cgi-bin/htm_hl.pl?DB=WebSite-Full&STEMMER=en&WORDS=paragon+&COLOUR=Black&STYLE=s&URL=/mfsd/ci/980713/issues.htm#muscat_highlighter_first_match

Bank of England capital issues for Paragon:
http://http://www.bankofengland.co.uk/cgi-bin/htm_hl.pl?DB=WebSite-Full&STEMMER=en&WORDS=paragon+&COLOUR=Black&STYLE=s&URL=/mfsd/ci/970711/issues.htm#muscat_highlighter_first_match

If you can't get into any of them, try going to the following page and doing a search for either Paragon or Ocwen:
http://www.bankofengland.co.uk/

What these tables suggest to you is that the Treasury is well aware of the way Paragon and Ocwen run their businesses. You don't raise money for a company without knowing a lot about its business. Indeed, the Bank of England now owns one of Paragon/National Home Loans' specialist lenders after financially supporting it for years. That bank is NMB - known to customers as "Consumer Loans" of Solihull. The high interest rates it still charges mortgage borrowers were exposed by The Times just three months ago (27/11/99 edition).

The original Sunday Times story on people being advised to go to these lenders is at:
http://www.sunday-times.co.uk/news/pages/sti/2000/01/23/stimonnws01030.html?<<%U

The Times' story on the Bank of England owning Consumer Loans is at:
http://www.sunday-times.co.uk/news/pages/tim/1999/11/27/timwkmwkm01014.html?999

----< And regulation won't change it >------------------------------------
Not according to us, not according to consumer groups. Asked if they were pleased about new Government plans to regulate mortgages, they pretty much all said no.

The reason?

Because mortgage salespeople will continue to give consumers bad advice. That's what the Guardian discovered when it polled around for reaction to the news.

If you are a regular subscriber to this newsletter you will already know what difference we think regulation will make, so we'll just point you the online Guardian's story:
http://www.newsunlimited.co.uk/uk_news/story/0,3604,129352,00.html

----< Shortfall limit reduced - sort of >-------------------------------
The Council of Mortgage Lenders announced this week that its members will lovingly and caringly stop chasing former customers for repoossession shortfalls after six years... but not really.

What it said was that they will not chase those customers that they have not already started chasing. What they didn't say was what they meant by "not already started chasing".

This prompted a slew of emails to us from customers whose houses were repossessed more than six years ago and who have received shortfall demands but who have not received a writ. Nationwide and Abbey National customers dominated our inbox with this question.

We do not know the answer. What we continue to say is that if you feel that your lender mis-sold you a mortgage, mis-sold you a MIG or under- sold your property after repossession, you should welcome the opportunity to see them in court.

It's not popular advice and for some it would be foolish advice. But for most of the cases we have seen, a well-fought defence and negligence counterclaim would have been the best response to the shortfall claim.

Of course, our bizarre belief that the civil court is actually there to provide a neutral, third party review of disputes liek these does not help us answer the question of how many people the CML's announcement will actually help.

To get an idea, you can put that question another way: how much are the CML's mortgage lender members really giving up?

Not much.

In our opinion, most of the shortfall claims from the 1980s-1990s recession have been processed and dealt with. Although there has been a lot of press talk about the quarter of a million people facing shortfall claims, we think the press got hold of the story a little late. The press is really reporting the trailing edge of a wave of shortfall claims that started in about 1994, peaked in 1997 and is now tailing off. Again, we stress that this is just our opinion.

The CML's press release is at:
http://www.cml.org.uk/press/2000/a&ph299.htm

The Guardian has an interesting story on this at:
http://www.newsunlimited.co.uk/business/story/0,3604,129299,00.html

In fact, the Guardian has several useful stories on the mortgage repossession shortfall game. Hit this link to see more stories:
http://www.searchunlimited.co.uk/search97cgi/s97newsr_cgi?query=six+years+and+repossession&QueryText=%28%28six+years+and+repossession%29%29+AND+VdkPublicationdate+%3E%3D+21+Jan+2000&ResultColSize=1000&Action=FilterSearch&Filter=FltNews%5FArticle%2Ehts&ResultTemplate=News%5FArticle%5FFull%2Ehts&Dtv=0

----< FSA to regulate mortgage lenders - in 2001 >----------------
So said a terribly pleased Government last week.

Unfortunately, the various consumer groups who keep an eye on this sort of thing could only muster another of those "muted responses"

Again, you know what we think: FSA to do the regulating... FSA run by ex-lender managers... staffed by people who lacked the drive to make it in the private sector... FSA more concerned about getting comfy in its new building... FSA got too much on its plate... FSA keen to do "cost- benefit analysis" (as recommended by the lenders they will be, er regulating).

It's all a sorry story. But at least the BBC liked it:
http://news.bbc.co.uk/hi/english/business/newsid_619000/619091.stm

----< Prize draw booby prizes >-----------------------------------
Of course, when you're short of cash - perhaps because you've been repossessed - and think you'll never own your own home, those junk mail offers to enrol you in £1,000,000 prize draws start to look attractive in a way that junk mail never did before.

We know that no-one in their right mind actually fills in this stuff but if you're short of cash and think it could be a way out, stop and read the small print first.

You could be giving away details about yourself to a tracing agency. To find out more, visit the Debt Industry section of the Home Repossession Page and read the section entitled "But many people simply trace themselves".

----< We messed up. Then we messed up again >---------------------
As part of our policy of showing Abbey National, Cheltenham & Gloucester/Lloyds TSB and CIFAS how to handle one's own mistakes, we have a policy of searching our systems for mistakes and owning up to them publicly.

Last week, we found that the new "Good lender, Bad Lender" charts were incorrectly showing some bad lenders as new entrants to the Top Five bad lender charts when they weren't. They'd been in the Top Five all along.

We recoded the charts software to fix the problem. This morning though, we found that we had messed up the repair and that this week's chart had gone out without its title lines. So we've recoded it and apologise for any confusion caused.

----< Changes to the web-site >-----------------------------------
Updated the Debt Industry section to re-enable links to skip tracers, debt collectors and other debt businesses.

Added a copy example of a junk mail prize draw that could get you into trouble. It is also in the Debt Industry section.

Added a set of forums wehre people can post their views, experiences and thoughts about individual mortgage lenders.

[ends]

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