How does Buy to Let END!

[sarahbell]

2 hours ago, JoeDavola said:

Yeah there's a couple of slum apartments for sale recently in the university area here - a terraced house converted into a couple of flats on sale for £290K and they're claiming 9.3% yield:

https://www.propertypal.com/unit-1-2-85-university-avenue-belfast/779554

If it was that good, i.e. an easy 9.3% return after all costs, they wouldn't be selling it IMO.

I think part of the elephant in the room here especially for these slums is not only the soaring cost of borrowing but the soaring cost of maintenance once the students/immigrants who have been renting it trash the place every year.

And the energy bills.

 

[AWW]

4 hours ago, Long time lurking said:

 

"New research" 

[JoeDavola]

8 minutes ago, sarahbell said:

And the energy bills.

Yes so many people seem to have built their lives on the assumption that both cheap credit and cheap energy would last forever.

[spygirl]

6 hours ago, JoeDavola said:

Yeah there's a couple of slum apartments for sale recently in the university area here - a terraced house converted into a couple of flats on sale for £290K and they're claiming 9.3% yield:

https://www.propertypal.com/unit-1-2-85-university-avenue-belfast/779554

If it was that good, i.e. an easy 9.3% return after all costs, they wouldn't be selling it IMO.

I think part of the elephant in the room here especially for these slums is not only the soaring cost of borrowing but the soaring cost of maintenance once the students/immigrants who have been renting it trash the place every year.

The Scabby one wasrefurbed 2y ago.

 

[AWW]

6 hours ago, JoeDavola said:

Yes so many people seem to have built their lives on the assumption that both cheap credit and cheap energy would last forever.

I was just having the same conversation with a friend who's a bit green when it comes to politics and macro. Lots of people have never really had it bad at all and are going to be very surprised when the government doesn't (/can't) do anything to help them pay the mortgage. 

[spygirl]

9 hours ago, AWW said:

I was just having the same conversation with a friend who's a bit green when it comes to politics and macro. Lots of people have never really had it bad at all and are going to be very surprised when the government doesn't (/can't) do anything to help them pay the mortgage. 

The variations of this sort of headline -

Average UK mortgage rates at highest for 14 years

https://www.housingtoday.co.uk/news/average-uk-mortgage-rates-at-highest-for-14-years/5119798.article

Just goes to show how bent out of shape UK credit n housing is.

Mortgages are so much going up as normalising.

Weve had a ~15y experiment on baling out ofthat fuckhead Brown.

Its failed.

What the media are missing are headlines like -

UK welfare spend highest on record

10m-15m migrants mainly living  on benefits and free at use public services.

UK working age benefits pay for 50% of household.These are also going.

 

[AWW]

39 minutes ago, spygirl said:

What the media are missing are headlines like -

UK welfare spend highest on record

10m-15m migrants mainly living  on benefits and free at use public services.

UK working age benefits pay for 50% of household.These are also going.

The headlines might not be there, but they don't have to be - everyone bar a small coterie of people who've done well out of two decades of rentierism knows the score.

Dosbods is far closer to the real people you meet in everyday life, yes even though I'm a hated City type, than Twitter or Mumsnet.

[No One]

 

 

 

woa, Ma talks about the end of BTL!!!!!!!!!!

[spygirl]

https://forums.moneysavingexpert.com/discussion/6190962/mortgage-broker-ask-me-anything/p649

Chally2697 said:

Hi,
I am new to the forum but I’m hoping you can help. Not sure if this question has been previously asked.
Fourteen years ago i purchased a flat off plan as a buy to let investment in Durham. The flat was initially valued at £130,000 by the mortgage company. I put £10,000 deposit down and mortgaged the rest with Birmingham Midshires at the time. I have had the flat let out for the majority of this time and have been able to cover the mortgage payments. The mortgage i have with Birmingham Midshires is an Interest only mortgage and £120,000 is still owed. I have 11 years left on the mortgage. When me and my partner initially purchased the property it was as an investment. I have never seen the property reach anywhere near the original purchase price and for the most part the flats current value has been around £85,000 - £90,000. 

My feelings are that a major miscalculation was made by the mortgage company when it was initially valued for mortgage purposes. Would i have any grounds for complaint or claim in respect of the original valuation by Birmingham Midshires? If so who would be best to contact?

Thank you

The mortgage company didn’t tell you to pay 130k for it though right? 

 

The builder / developer / estate agent & yourself valued it at £130k. A valuer then agreed it was worth around the same amount and the bank lent you the money to buy it. 

 

I don’t think there is any negligence here from BM as they are not the ones who have valued the property in question. 

 

As with the conditions of IO mortgages I’m assuming you’ve got a suitable repayment vehicle in place to neutralise your position? With an expected downturn in property values looming (and the IO chickens soon coming home to roost) it might be prudent to sell / redeem your mortgage perhaps?

[Wight Flight]

8 minutes ago, spygirl said:

https://forums.moneysavingexpert.com/discussion/6190962/mortgage-broker-ask-me-anything/p649

Chally2697 said:

Hi,
I am new to the forum but I’m hoping you can help. Not sure if this question has been previously asked.
Fourteen years ago i purchased a flat off plan as a buy to let investment in Durham. The flat was initially valued at £130,000 by the mortgage company. I put £10,000 deposit down and mortgaged the rest with Birmingham Midshires at the time. I have had the flat let out for the majority of this time and have been able to cover the mortgage payments. The mortgage i have with Birmingham Midshires is an Interest only mortgage and £120,000 is still owed. I have 11 years left on the mortgage. When me and my partner initially purchased the property it was as an investment. I have never seen the property reach anywhere near the original purchase price and for the most part the flats current value has been around £85,000 - £90,000. 

My feelings are that a major miscalculation was made by the mortgage company when it was initially valued for mortgage purposes. Would i have any grounds for complaint or claim in respect of the original valuation by Birmingham Midshires? If so who would be best to contact?

Thank you

The mortgage company didn’t tell you to pay 130k for it though right? 

 

The builder / developer / estate agent & yourself valued it at £130k. A valuer then agreed it was worth around the same amount and the bank lent you the money to buy it. 

 

I don’t think there is any negligence here from BM as they are not the ones who have valued the property in question. 

 

As with the conditions of IO mortgages I’m assuming you’ve got a suitable repayment vehicle in place to neutralise your position? With an expected downturn in property values looming (and the IO chickens soon coming home to roost) it might be prudent to sell / redeem your mortgage perhaps?

And then this gem...

Quote

Hello,

i need a little help on this please. Natwest asked for further documents such a company accounts but one year is in loss and this year in small profit. Although ive a huge turnover. Is this going to cause a problem? But ive been paying myself salary on time. 

 

Although ive other source of income such as rental, working tax credits. 

 

Is that going to cause some issue. Please any help?

 

[King Penda]

On 19/10/2022 at 13:31, JoeDavola said:

Yeah there's a couple of slum apartments for sale recently in the university area here - a terraced house converted into a couple of flats on sale for £290K and they're claiming 9.3% yield:

https://www.propertypal.com/unit-1-2-85-university-avenue-belfast/779554

If it was that good, i.e. an easy 9.3% return after all costs, they wouldn't be selling it IMO.

I think part of the elephant in the room here especially for these slums is not only the soaring cost of borrowing but the soaring cost of maintenance once the students/immigrants who have been renting it trash the place every year.

Indeed I used to have a friend that was a handyman for btl landlords one group were notorious and had put the bottom of the shower through he got me 50 quid by saying he was not going in there on his own has they were animals .we ended up going out on the piss with them and I got 50 quid lol

[Wight Flight]

10 minutes ago, Wight Flight said:

And then this gem...

 

It got better...

Quote

This is the further info required by my underwriter. 

Does he only want to see 2022?

my profit is 716 and turnover around 47600 and i am not sure what he means by capital accounts. If that shareholder funds that is in minus like (2220) 
with a salary of 515. 

 

[Cosmic]

20 minutes ago, Wight Flight said:

It got better...

Pack in the make work scheme and get a job on the tills, you daft twat.

[spygirl]

9 hours ago, spygirl said:

https://forums.moneysavingexpert.com/discussion/6190962/mortgage-broker-ask-me-anything/p649

Chally2697 said:

Hi,
I am new to the forum but I’m hoping you can help. Not sure if this question has been previously asked.
Fourteen years ago i purchased a flat off plan as a buy to let investment in Durham. The flat was initially valued at £130,000 by the mortgage company. I put £10,000 deposit down and mortgaged the rest with Birmingham Midshires at the time. I have had the flat let out for the majority of this time and have been able to cover the mortgage payments. The mortgage i have with Birmingham Midshires is an Interest only mortgage and £120,000 is still owed. I have 11 years left on the mortgage. When me and my partner initially purchased the property it was as an investment. I have never seen the property reach anywhere near the original purchase price and for the most part the flats current value has been around £85,000 - £90,000. 

My feelings are that a major miscalculation was made by the mortgage company when it was initially valued for mortgage purposes. Would i have any grounds for complaint or claim in respect of the original valuation by Birmingham Midshires? If so who would be best to contact?

Thank you

The mortgage company didn’t tell you to pay 130k for it though right? 

 

The builder / developer / estate agent & yourself valued it at £130k. A valuer then agreed it was worth around the same amount and the bank lent you the money to buy it. 

 

I don’t think there is any negligence here from BM as they are not the ones who have valued the property in question. 

 

As with the conditions of IO mortgages I’m assuming you’ve got a suitable repayment vehicle in place to neutralise your position? With an expected downturn in property values looming (and the IO chickens soon coming home to roost) it might be prudent to sell / redeem your mortgage perhaps?

 

9 hours ago, Wight Flight said:

And then this gem...

 

 

9 hours ago, Wight Flight said:

It got better...

 

A quick chat to the 90% of IO BTL would have shown they are a bunch of fucking morons.

The only person IO BTL would have made sense for would have been a potless chancer with the ability to borrow ££££££

I mention that as our local esteemed BS which blew up in 2008

https://en.wikipedia.org/wiki/Scarborough_Building_Society

has lent well over 1M to a pro cripple on DLA living in a council flat.

I know this as the were dragging in 20yos to man the IO BTL underwriting team as they were doing so much business.

~150 years of plodding long, then ~4 years of £££££££££ and excitement before imploding.

April 2009

https://www.thebusinessdesk.com/yorkshire/news/2801-scarborough-chief-to-retire

JOHN CARRIER, the long-serving chief executive of Scarborough Building Society, is to retire from the organisation.

Mr Carrier, who has held the position at the Scarborough-based building society, said: “As I reach age 60 this year, and with another good set of results expected when we reach our financial year end on April 30, I have decided that 2008 should be my last year.”

Under Mr Carrier’s leadership, the Society’s assets have grown from £300m to almost £3bn, with total assets under management of nearly £5bn.

Scarborough Group chairman William Worsley said: “The board understands and accepts John’s decision and our focus now is on ensuring we appoint the best possible candidate to succeed him and lead our successful business into the next, exciting phase of its development.”

Mr Carrier will retire on December 31 and  both internal and external candidates will be invited to apply for his post.

Scarborough Building Society Group has a range of subsidiaries including mortgage asset administration company Scarborough Mortgage Services and Guernsey-based offshore deposit-taker Scarborough Channel Islands.

Mr Worsley added: “The board will consider applications from both internal candidates at director level, and also from external candidates within the financial services sector.

“We are keen to maintain corporate governance best practice, which recommends a transparent process of competitive selection, allowing the most able candidate to be chosen to lead the business thereafter.

“The Society’s board remains fiercely committed to Scarborough’s independence and to further developing its diverse and robust business model as the UK’s 17th largest building society.”

Nov 2008

https://www.thisismoney.co.uk/money/saving/article-1646184/Skipton-to-merge-with-Scarborough-BS.html

Skipton Building Society announced today it is to merge with its smaller rival Scarborough early next year.

http://img.thisismoney.co.uk/i/pix/2008/04/GoodfellowFMOS_203x150.jpg

Big player: John Goodfellow from Skipton was in talks with his smaller rival for some time

The deal, which should be completed by the first quarter of next year, will create a top five building society with around 860,000 members and £16bn of assets.

But in a bid to preserve the capital reserves of the enlarged group, members of the two societies will not receive a windfall nor will they have a say on whether the merger will go ahead; this mirrors the controversial mergers of Derbyshire and Cheshire building societies with Nationwide, to be completed later this year.

[One percent]

10 hours ago, Wight Flight said:

It got better...

 

It’s her pension innit. 

[GTM]

11 hours ago, spygirl said:

As with the conditions of IO mortgages I’m assuming you’ve got a suitable repayment vehicle in place to neutralise your position?

😂

[Guest]

13 hours ago, Wight Flight said:

And then this gem...

 

Seems like we are reaching the 'tide has gone out, bare arses fully on display' stage.

[spygirl]

5 hours ago, spygirl said:

 

 

A quick chat to the 90% of IO BTL would have shown they are a bunch of fucking morons.

The only person IO BTL would have made sense for would have been a potless chancer with the ability to borrow ££££££

I mention that as our local esteemed BS which blew up in 2008

https://en.wikipedia.org/wiki/Scarborough_Building_Society

has lent well over 1M to a pro cripple on DLA living in a council flat.

I know this as the were dragging in 20yos to man the IO BTL underwriting team as they were doing so much business.

~150 years of plodding long, then ~4 years of £££££££££ and excitement before imploding.

April 2009

https://www.thebusinessdesk.com/yorkshire/news/2801-scarborough-chief-to-retire

JOHN CARRIER, the long-serving chief executive of Scarborough Building Society, is to retire from the organisation.

Mr Carrier, who has held the position at the Scarborough-based building society, said: “As I reach age 60 this year, and with another good set of results expected when we reach our financial year end on April 30, I have decided that 2008 should be my last year.”

Under Mr Carrier’s leadership, the Society’s assets have grown from £300m to almost £3bn, with total assets under management of nearly £5bn.

Scarborough Group chairman William Worsley said: “The board understands and accepts John’s decision and our focus now is on ensuring we appoint the best possible candidate to succeed him and lead our successful business into the next, exciting phase of its development.”

Mr Carrier will retire on December 31 and  both internal and external candidates will be invited to apply for his post.

Scarborough Building Society Group has a range of subsidiaries including mortgage asset administration company Scarborough Mortgage Services and Guernsey-based offshore deposit-taker Scarborough Channel Islands.

Mr Worsley added: “The board will consider applications from both internal candidates at director level, and also from external candidates within the financial services sector.

“We are keen to maintain corporate governance best practice, which recommends a transparent process of competitive selection, allowing the most able candidate to be chosen to lead the business thereafter.

“The Society’s board remains fiercely committed to Scarborough’s independence and to further developing its diverse and robust business model as the UK’s 17th largest building society.”

Nov 2008

https://www.thisismoney.co.uk/money/saving/article-1646184/Skipton-to-merge-with-Scarborough-BS.html

Skipton Building Society announced today it is to merge with its smaller rival Scarborough early next year.

http://img.thisismoney.co.uk/i/pix/2008/04/GoodfellowFMOS_203x150.jpg

Big player: John Goodfellow from Skipton was in talks with his smaller rival for some time

The deal, which should be completed by the first quarter of next year, will create a top five building society with around 860,000 members and £16bn of assets.

But in a bid to preserve the capital reserves of the enlarged group, members of the two societies will not receive a windfall nor will they have a say on whether the merger will go ahead; this mirrors the controversial mergers of Derbyshire and Cheshire building societies with Nationwide, to be completed later this year.

OK ,checked the how long it took for the CEO to blow it up - .

16 years.

https://www.mortgagefinancegazette.com/market-news/mortgage-servicing/scarborough-means-business-01-11-2006/

Scarborough means business

By admin in FINTECH, Market news, Mortgage servicing 1st November 2006 0

 

Scarborough Building Society is upping the ante in its third-party administration business and has set up a sub-prime subsidiary so it can cover the whole of the lending spectrum. Joanne Atkin reports

Scarborough Building Society is setting out its stall and challenging the might of HML and Vertex in the third-party mortgage administration sector. The society's servicing subsidiary, Scarborough Mortgage Services (SMS), and its asset trading arm, North Yorkshire Mortgages (NYM), were both set up in 1990 and are going through unprecedented growth and development. This has been helped by Scarborough's investment in new systems, new processes, new people and new capability.

SMS has a dozen or so clients ranging from small building societies to large investment banks. It's the latter that SMS is particularly interested in.

A growing number of large, foreign investment banks are entering the UK mortgage market and they're all after a slice of the lucrative specialist lending cake.

 

George Haslem, head of operations at Scarborough, says: “The investment banks are driving the growth and success of SMS and NYM.”

Scarborough currently has two investment bank clients and is in advanced talks with a third. It operates a partnership strategy with them. Its first bank client was WestLB subsidiary Basinghall Finance, launched in September 2005. It has used the services of NYM to buy mortgage assets of some £660 million, and SMS has been servicing those loans. Basinghall has been able to build up a sizeable mortgage portfolio consisting of a range of mortgages from prime to sub-prime, through to buy-to-let and self-certification. It is now ready to start originating its own mortgages with SMS servicing the loans, and is due to launch soon as a lender in its own right.

Lehman Brothers, a subsidiary of US-owned SPML, is the latest client of SMS and recently bought a £180 million mortgage portfolio. “We will be able to announce another major client by the end of this year,” adds Haslem.

 

 

Longer-established clients include Derbyshire Home Loans, Mortgages plc and a number of local and regional building societies.

Proactive

Scarborough is the 18th-largest building society, with total assets under management of £3 billion. So why are global investment banks going to a regional building society for help to get them into the UK mortgage market?

“We are being more proactive,” explains Haslem. “Organisations are coming to us to find out what we are about. We can put new assets on to a mortgage book within six weeks to three months. We understand the profile of a portfolio and can configure it to meet the needs of a client. We can also acquire portfolios on behalf of a client from the likes of GMAC-RFC and then we service it.

“We agree the service criteria with our clients – we listen to what clients want and respond rapidly. For example, we are able to do 24-hour further advances. If a Scarborough Building Society borrower wants to borrow more money, in over 50 per cent of cases they will have the funds the same day. We have that capability but none of our clients want it yet. When they do, we will be ready to go.”

Chief executive John Carrier adds: “We wanted to create an alternative to HML, which is a great business. We have been working on being more flexible and approachable with the ability to grow. We want to deal with a relatively small number of large clients and are talking to a significant number of large players. We believe the mortgage marketplace will open up for SMS.”

As well as trading mortgage books and serving loans, for the past two to three years the society has been securitising assets, including some of the mortgage assets of Scarborough Building Society.

Up until now SMS has not had an official service rating from a rating agency but this is to change. Fitch Ratings has assessed SMS and the result is imminent. The rating is based on ability to administer residential mortgage loans effectively and takes into account commitment to ongoing business development, process improvement, arrears management and general reporting. A rating will put the seal of approval on SMS's service capability.

AVMs

Scarborough Building Society started using Automated Valuation Models (AVMs) in August, primarily for remortgage cases with low loan-to-value – 60 per cent or less.

If an AVM is used, the cost to the borrower will go down from £285 to £150. The use of AVMs will be reviewed after six months and the LTV may rise to 65 or 70 per cent on remortgage cases as the society gets more experienced with this new technology. The use of AVMs could also be rolled out for house purchase mortgages.

In addition, if AVMs are working effectively, Scarborough will consider instant mortgage offers. Some time in the first half of 2007 it hopes to join the likes of GMAC-RFC and edeus with point-of-sale offers.

Tony Burdin, head of group marketing, predicts: “Once lenders become confident with the technology and accuracy we could be seeing 80 per cent LTV as the norm.”

Initially, the society's new sub-prime lending subsidiary Scarborough Specialist Mortgages (SSM) will not use AVMs, but this will be reviewed after six months.

Lending strategy

Scarborough undertook a major review of its lending strategy in November 2005. The outcome highlighted a number of new areas the society wanted to be involved in and over the next couple of years new products will be developed.

Carrier says: “We recognised that there is a growing debt culture in the UK, so we will lend across the whole market.”

Burdin outlined some of the areas the society wants to improve on: “We see first-time buyers as a significant set of people that we must help so are developing a product using parental help. Our self-build/renovation product will be revamped to be more flexible and help people with cashflow, which can be a big problem for self-build borrowers.”

Looking further ahead the society is also contemplating equity release, but not for at least two years. “It's a generation thing,” explains Burdin. “Research has shown that the generation approaching retirement age has a different attitude to the majority of today's older people, and they will be more willing to release equity from their homes rather than leave property to their children.”

The review also led to the inevitable non-conforming sector, but Burdin says the society has good reason to move into this market: “It isn't a reaction to jump into the sub-prime market just because everyone else is. We believe it is a natural fit as we have experience of sub-prime with our SMS and NYM clients.”

Sub-prime subsidiary

Scarborough Specialist Mortgages (SSM) was launched on 9 October, initially to select packagers and key business partners and will eventually offer business-to-consumer solutions. It took six months for the processes and systems to be bedded in before launch.

A full spectrum of products are being offered from near prime through to heavy adverse, including buy-to-let and adverse buy-to-let.

Scarborough Building Society already offers buy-to-let products and entered the holiday-let and student-let mortgage market at the end of 2005. “We are getting decent volumes and gaining a good reputation in this area of lending,” says Burdin.

“Our research showed that there is a high complexity of products in the sub-prime sector, so we decided to keep it simple. We are only offering two-year fixes and trackers, all with flexible features. The only loading will be on self-cert – except buy-to-let self-cert, which we are not doing.

“Most sub-prime business is for two-year products, as clients try to repair their credit sooner rather than later, but we would consider longer-term products if the demand was there. We might also do some exclusives.”

Distribution

Packagers play an important part in distribution, introducing around two-thirds of sub-prime business to the industry. Scarborough had never dealt with packagers before so researched the market by going out and having discussions with many of them.

SSM has opted for exclusive distribution with two packaging associations initially, the Alliance of Mortgage Packagers & Distributors (AMPD) and Freehold, which have access to 30 individual packaging firms.

Also important to Scarborough is its existing key relationships with distributors. So it will also be offering its product range through John Charcol, London & Country, Legal & General Mortgage Club, Mortgage Intelligence, Personal Touch and Premier Portfolio.

Internet portal

An internet portal has been set up for intermediaries to use – where they can produce Key Facts Illustrations (KFIs), receive a decision in principle and keep track of cases. The portal has also been built so it can be multi-branded and adapted to cater for any lender's products.

Underwriters

The new business process teams have multi-skilled underwriters. “Sub-prime underwriting is very different from prime underwriting and requires a different mindset,” says Burdin. “We wanted to buy in the right skills, so when Kensington Mortgages closed its Northern office we took on three of its former sub-prime underwriters. They have been able to train up five of own prime underwriters who are now skilled in all aspects of mortgage underwriting.”

A dedicated processing centre has been set up in Leeds, above the Scarborough's branch, where the three former Kensington underwriters are based. There is capacity for three further staff at the Leeds office, and at least one more underwriter is being recruited.

A business relationship team has been put together consisting of three regional development managers, one each to cover the North, South and Midlands. They will develop new business and look after ongoing business relationships.

Branding

Scarborough rebranded a couple of years ago. SSM is part of a family of brands where the same values are applied across the board. The name shows that the sub-prime arm is part of a building society which borrowers recognise. Burdin says that research has shown brokers have to spend time explaining to a borrower who a lender is if its name is not well known.

Carrier says that the SSM name is self-explanatory – Scarborough indicates the relationship with the mutual building society and Specialist Mortgages specifies the type of lending it offers. “We could have gone with the trend of naming yourself after fruit or even God,” remarks Carrier. “But we wanted to keep it simple and have the name reflect what it is we do.”

SSM and SMS

Specialist lender SSM fits in nicely with the third-party administration arm SMS, as mortgage assets it originates will be held on balance sheet, traded and securitised.

Brokers have access to both the building society for prime mortgages and SSM for the sub-prime range. In addition, SSM's products will be offered direct to consumers in the new year through Scarborough's nine branches. This will make Scarborough one of the first high street lenders to offer sub-prime loans in branches without being referred to another lender or subsidiary.

Reorganisation

Four years ago Scarborough Building Society moved into a purpose-built head office on the outskirts of the seaside town. Prior to this its main offices had been spread over three sites within Scarborough, but the headquarters heralded the dawn of a new era.

Chief executive John Carrier has been at the helm of Scarborough since 1992 and joined 20 years ago as general manager (operations) and secretary. He believes business moves in cycles and you need to know when to move the business on. “Being under one roof meant a new environment and greater efficiency,” he says. “And market pressures signalled it was time to develop the next phase of business.

“A strategic overview of the whole business was conducted, and we split it into four areas: strategy; operations; systems; and culture. These areas are interlinked and influence each other. We needed to restructure in order to work better and smarter, to deliver greater value for our members and to improve communications. The subsidiaries all had parts to play but needed to do more. We have achieved more through big changes in technology by migrating systems onto a new platform.”

In 2003 the society bought in new systems from Sandstone Technology, an Australian company, so its core mortgage system could be fully automated in time for the introduction of mortgage regulation on 31 October 2004. By M-Day the society had launched full capacity automatic application capture, complete with KFIs.

It has also developed a front-end portal for seamless processing which was developed for both Scarborough Building Society and clients of SMS. The portal was initially launched for Basinghall but it can be rolled out and adapted for any new lender.

Haslem calls it “lenderisation” – adapting the process to any client. “We build it once then make it adaptable to anyone,” he says.

End-to-end processing

The complete end-to-end processing – for both direct customers and clients of the subsidiaries – is carried out by around 80 staff divided into areas and subdivided into teams, such as post-completion, arrears, prime and specialist. Staff numbers have been growing somewhere in the region of 10 to 15 per cent this year alone with more growth anticipated.

Scarborough has a dedicated contact centre and teams in each business area are allocated to a client. The way the teams are set up means people can be moved around if necessary to cope with the peaks and troughs of business levels and client activity.

The society has developed its own internal Customer Relationship Management (CRM) system, which has been in place for around 18 months. All advisers can see a complete customer history, not just which products they have but it's also where any contact with customers is logged. To help with management information the system also measures the effectiveness of the teams.

[JohnnyB]

18 hours ago, spygirl said:

OK ,checked the how long it took for the CEO to blow it up - .

16 years.

https://www.mortgagefinancegazette.com/market-news/mortgage-servicing/scarborough-means-business-01-11-2006/

Scarborough means business

By admin in FINTECH, Market news, Mortgage servicing 1st November 2006 0

 

Scarborough Building Society is upping the ante in its third-party administration business and has set up a sub-prime subsidiary so it can cover the whole of the lending spectrum. Joanne Atkin reports

Scarborough Building Society is setting out its stall and challenging the might of HML and Vertex in the third-party mortgage administration sector. The society's servicing subsidiary, Scarborough Mortgage Services (SMS), and its asset trading arm, North Yorkshire Mortgages (NYM), were both set up in 1990 and are going through unprecedented growth and development. This has been helped by Scarborough's investment in new systems, new processes, new people and new capability.

SMS has a dozen or so clients ranging from small building societies to large investment banks. It's the latter that SMS is particularly interested in.

A growing number of large, foreign investment banks are entering the UK mortgage market and they're all after a slice of the lucrative specialist lending cake.

 

George Haslem, head of operations at Scarborough, says: “The investment banks are driving the growth and success of SMS and NYM.”

Scarborough currently has two investment bank clients and is in advanced talks with a third. It operates a partnership strategy with them. Its first bank client was WestLB subsidiary Basinghall Finance, launched in September 2005. It has used the services of NYM to buy mortgage assets of some £660 million, and SMS has been servicing those loans. Basinghall has been able to build up a sizeable mortgage portfolio consisting of a range of mortgages from prime to sub-prime, through to buy-to-let and self-certification. It is now ready to start originating its own mortgages with SMS servicing the loans, and is due to launch soon as a lender in its own right.

Lehman Brothers, a subsidiary of US-owned SPML, is the latest client of SMS and recently bought a £180 million mortgage portfolio. “We will be able to announce another major client by the end of this year,” adds Haslem.

 

 

Longer-established clients include Derbyshire Home Loans, Mortgages plc and a number of local and regional building societies.

Proactive

Scarborough is the 18th-largest building society, with total assets under management of £3 billion. So why are global investment banks going to a regional building society for help to get them into the UK mortgage market?

“We are being more proactive,” explains Haslem. “Organisations are coming to us to find out what we are about. We can put new assets on to a mortgage book within six weeks to three months. We understand the profile of a portfolio and can configure it to meet the needs of a client. We can also acquire portfolios on behalf of a client from the likes of GMAC-RFC and then we service it.

“We agree the service criteria with our clients – we listen to what clients want and respond rapidly. For example, we are able to do 24-hour further advances. If a Scarborough Building Society borrower wants to borrow more money, in over 50 per cent of cases they will have the funds the same day. We have that capability but none of our clients want it yet. When they do, we will be ready to go.”

Chief executive John Carrier adds: “We wanted to create an alternative to HML, which is a great business. We have been working on being more flexible and approachable with the ability to grow. We want to deal with a relatively small number of large clients and are talking to a significant number of large players. We believe the mortgage marketplace will open up for SMS.”

As well as trading mortgage books and serving loans, for the past two to three years the society has been securitising assets, including some of the mortgage assets of Scarborough Building Society.

Up until now SMS has not had an official service rating from a rating agency but this is to change. Fitch Ratings has assessed SMS and the result is imminent. The rating is based on ability to administer residential mortgage loans effectively and takes into account commitment to ongoing business development, process improvement, arrears management and general reporting. A rating will put the seal of approval on SMS's service capability.

AVMs

Scarborough Building Society started using Automated Valuation Models (AVMs) in August, primarily for remortgage cases with low loan-to-value – 60 per cent or less.

If an AVM is used, the cost to the borrower will go down from £285 to £150. The use of AVMs will be reviewed after six months and the LTV may rise to 65 or 70 per cent on remortgage cases as the society gets more experienced with this new technology. The use of AVMs could also be rolled out for house purchase mortgages.

In addition, if AVMs are working effectively, Scarborough will consider instant mortgage offers. Some time in the first half of 2007 it hopes to join the likes of GMAC-RFC and edeus with point-of-sale offers.

Tony Burdin, head of group marketing, predicts: “Once lenders become confident with the technology and accuracy we could be seeing 80 per cent LTV as the norm.”

Initially, the society's new sub-prime lending subsidiary Scarborough Specialist Mortgages (SSM) will not use AVMs, but this will be reviewed after six months.

Lending strategy

Scarborough undertook a major review of its lending strategy in November 2005. The outcome highlighted a number of new areas the society wanted to be involved in and over the next couple of years new products will be developed.

Carrier says: “We recognised that there is a growing debt culture in the UK, so we will lend across the whole market.”

Burdin outlined some of the areas the society wants to improve on: “We see first-time buyers as a significant set of people that we must help so are developing a product using parental help. Our self-build/renovation product will be revamped to be more flexible and help people with cashflow, which can be a big problem for self-build borrowers.”

Looking further ahead the society is also contemplating equity release, but not for at least two years. “It's a generation thing,” explains Burdin. “Research has shown that the generation approaching retirement age has a different attitude to the majority of today's older people, and they will be more willing to release equity from their homes rather than leave property to their children.”

The review also led to the inevitable non-conforming sector, but Burdin says the society has good reason to move into this market: “It isn't a reaction to jump into the sub-prime market just because everyone else is. We believe it is a natural fit as we have experience of sub-prime with our SMS and NYM clients.”

Sub-prime subsidiary

Scarborough Specialist Mortgages (SSM) was launched on 9 October, initially to select packagers and key business partners and will eventually offer business-to-consumer solutions. It took six months for the processes and systems to be bedded in before launch.

A full spectrum of products are being offered from near prime through to heavy adverse, including buy-to-let and adverse buy-to-let.

Scarborough Building Society already offers buy-to-let products and entered the holiday-let and student-let mortgage market at the end of 2005. “We are getting decent volumes and gaining a good reputation in this area of lending,” says Burdin.

“Our research showed that there is a high complexity of products in the sub-prime sector, so we decided to keep it simple. We are only offering two-year fixes and trackers, all with flexible features. The only loading will be on self-cert – except buy-to-let self-cert, which we are not doing.

“Most sub-prime business is for two-year products, as clients try to repair their credit sooner rather than later, but we would consider longer-term products if the demand was there. We might also do some exclusives.”

Distribution

Packagers play an important part in distribution, introducing around two-thirds of sub-prime business to the industry. Scarborough had never dealt with packagers before so researched the market by going out and having discussions with many of them.

SSM has opted for exclusive distribution with two packaging associations initially, the Alliance of Mortgage Packagers & Distributors (AMPD) and Freehold, which have access to 30 individual packaging firms.

Also important to Scarborough is its existing key relationships with distributors. So it will also be offering its product range through John Charcol, London & Country, Legal & General Mortgage Club, Mortgage Intelligence, Personal Touch and Premier Portfolio.

Internet portal

An internet portal has been set up for intermediaries to use – where they can produce Key Facts Illustrations (KFIs), receive a decision in principle and keep track of cases. The portal has also been built so it can be multi-branded and adapted to cater for any lender's products.

Underwriters

The new business process teams have multi-skilled underwriters. “Sub-prime underwriting is very different from prime underwriting and requires a different mindset,” says Burdin. “We wanted to buy in the right skills, so when Kensington Mortgages closed its Northern office we took on three of its former sub-prime underwriters. They have been able to train up five of own prime underwriters who are now skilled in all aspects of mortgage underwriting.”

A dedicated processing centre has been set up in Leeds, above the Scarborough's branch, where the three former Kensington underwriters are based. There is capacity for three further staff at the Leeds office, and at least one more underwriter is being recruited.

A business relationship team has been put together consisting of three regional development managers, one each to cover the North, South and Midlands. They will develop new business and look after ongoing business relationships.

Branding

Scarborough rebranded a couple of years ago. SSM is part of a family of brands where the same values are applied across the board. The name shows that the sub-prime arm is part of a building society which borrowers recognise. Burdin says that research has shown brokers have to spend time explaining to a borrower who a lender is if its name is not well known.

Carrier says that the SSM name is self-explanatory – Scarborough indicates the relationship with the mutual building society and Specialist Mortgages specifies the type of lending it offers. “We could have gone with the trend of naming yourself after fruit or even God,” remarks Carrier. “But we wanted to keep it simple and have the name reflect what it is we do.”

SSM and SMS

Specialist lender SSM fits in nicely with the third-party administration arm SMS, as mortgage assets it originates will be held on balance sheet, traded and securitised.

Brokers have access to both the building society for prime mortgages and SSM for the sub-prime range. In addition, SSM's products will be offered direct to consumers in the new year through Scarborough's nine branches. This will make Scarborough one of the first high street lenders to offer sub-prime loans in branches without being referred to another lender or subsidiary.

Reorganisation

Four years ago Scarborough Building Society moved into a purpose-built head office on the outskirts of the seaside town. Prior to this its main offices had been spread over three sites within Scarborough, but the headquarters heralded the dawn of a new era.

Chief executive John Carrier has been at the helm of Scarborough since 1992 and joined 20 years ago as general manager (operations) and secretary. He believes business moves in cycles and you need to know when to move the business on. “Being under one roof meant a new environment and greater efficiency,” he says. “And market pressures signalled it was time to develop the next phase of business.

“A strategic overview of the whole business was conducted, and we split it into four areas: strategy; operations; systems; and culture. These areas are interlinked and influence each other. We needed to restructure in order to work better and smarter, to deliver greater value for our members and to improve communications. The subsidiaries all had parts to play but needed to do more. We have achieved more through big changes in technology by migrating systems onto a new platform.”

In 2003 the society bought in new systems from Sandstone Technology, an Australian company, so its core mortgage system could be fully automated in time for the introduction of mortgage regulation on 31 October 2004. By M-Day the society had launched full capacity automatic application capture, complete with KFIs.

It has also developed a front-end portal for seamless processing which was developed for both Scarborough Building Society and clients of SMS. The portal was initially launched for Basinghall but it can be rolled out and adapted for any new lender.

Haslem calls it “lenderisation” – adapting the process to any client. “We build it once then make it adaptable to anyone,” he says.

End-to-end processing

The complete end-to-end processing – for both direct customers and clients of the subsidiaries – is carried out by around 80 staff divided into areas and subdivided into teams, such as post-completion, arrears, prime and specialist. Staff numbers have been growing somewhere in the region of 10 to 15 per cent this year alone with more growth anticipated.

Scarborough has a dedicated contact centre and teams in each business area are allocated to a client. The way the teams are set up means people can be moved around if necessary to cope with the peaks and troughs of business levels and client activity.

The society has developed its own internal Customer Relationship Management (CRM) system, which has been in place for around 18 months. All advisers can see a complete customer history, not just which products they have but it's also where any contact with customers is logged. To help with management information the system also measures the effectiveness of the teams.

We really should have stripped the banking class of their pensions and personal assets in 2009 and thrown them out into the gutter.

[spygirl]

2 minutes ago, JohnnyB said:

We really should have stripped the banking class of their pensions and personal assets in 2009 and thrown them out into the gutter.

Yep.

 

[Wight Flight]

On 21/10/2022 at 23:03, spygirl said:

https://forums.moneysavingexpert.com/discussion/6190962/mortgage-broker-ask-me-anything/p649

Chally2697 said:

Hi,
I am new to the forum but I’m hoping you can help. Not sure if this question has been previously asked.
Fourteen years ago i purchased a flat off plan as a buy to let investment in Durham. The flat was initially valued at £130,000 by the mortgage company. I put £10,000 deposit down and mortgaged the rest with Birmingham Midshires at the time. I have had the flat let out for the majority of this time and have been able to cover the mortgage payments. The mortgage i have with Birmingham Midshires is an Interest only mortgage and £120,000 is still owed. I have 11 years left on the mortgage. When me and my partner initially purchased the property it was as an investment. I have never seen the property reach anywhere near the original purchase price and for the most part the flats current value has been around £85,000 - £90,000. 

My feelings are that a major miscalculation was made by the mortgage company when it was initially valued for mortgage purposes. Would i have any grounds for complaint or claim in respect of the original valuation by Birmingham Midshires? If so who would be best to contact?

Thank you

The mortgage company didn’t tell you to pay 130k for it though right? 

 

The builder / developer / estate agent & yourself valued it at £130k. A valuer then agreed it was worth around the same amount and the bank lent you the money to buy it. 

 

I don’t think there is any negligence here from BM as they are not the ones who have valued the property in question. 

 

As with the conditions of IO mortgages I’m assuming you’ve got a suitable repayment vehicle in place to neutralise your position? With an expected downturn in property values looming (and the IO chickens soon coming home to roost) it might be prudent to sell / redeem your mortgage perhaps?

From that thread...

Quote

My BTL mortgage is due for renewal in Jul 2023.  If I was remortgaging today I think I would just under 65% ltv.  Rates have shot up so much that if I remortgage today then the mortgage payment would shoot up from £180 to £650 per month with my existing lender on I/O. The rent is currently £850. 

 

Im worried that either a) the rent won’t be sufficiently high to remortgage (I think first time around it had to be 145% (or 125%) of the mortgage stress tested at 5.5% so goodness knows what the stress test would be now) and I cannot put it up further. b) I also need to be mindful that my fixed rate on my residential mortgage (around 60/65% ltv) is up for renewal in July 2024 so I’m worried that if my BTL mortgage payment increases significantly then it will impact my ability to remortgage my home.   Income multiple for the my residential mortgage will be around x 2.5. 

 

My thoughts are that I should speak to my broker early next year as depending on how the market is I will need make a decision regarding to remortgage or put my BTL on the market. 

I’m not sure what I’m asking but it’s a minefield at the moment! Do you have any advice or tips? 

Raises lots of questions.

And one answer. Sell now. Except that wasn't the advice given.

[Ash4781b]

12 minutes ago, Wight Flight said:

From that thread...

Raises lots of questions.

And one answer. Sell now. Except that wasn't the advice given.

A lot of risk building up there

[macca]

On 20/10/2022 at 08:33, spygirl said:

 

Weve had a ~15y experiment on baling out ofthat fuckhead Brown.

 

 

I thought it all started going wrong when Thatcher gave away "our" trillions in north sea gas and oil?

Most buildings in London seem to be owned by oil wealth from the middle east.

Ironic we could be energy independent and drowning in money if not for the sale and expensive buying back of our own resources.

oil, gas, water, electricity, transportation, buy to let cunts, instead of cheap affordable council houses. Got rid of manufacturing/R&D and turned us into a banking racket,, which is just lots of people committing fraud and cooking figures as far as I can work out. Used to be allot of smart people in the UK before Thatcher.

Thatcher fucked us all to death way before Brown sold the gold on the cheap

[spygirl]

Bizarre You n Yours feature.

When criminals steal my house why can't I have it back?

https://www.bbc.co.uk/programmes/m001df51

Lots of 'my house'

A couple of 'x tole the house the owner does not live in ...' Err LL then?

Unasked questions - 

- is there a mortgage/bank charge on the house? I cant see this happening with a mortgage charge but ....

- Are you a LL

- Are you an above board legal LL?

- Have you been renting to people who had no right to be in the UK?

- Are you an absent LL?

- Do you follow the renting laws./rules to the dot?

 

[HousePriceMania]

Has BTL ended now ?