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Bank Of Scotland Accused Of Mortgage Fraud

Bank Of Scotland Accused Of Mortgage Fraud

Northern Ireland Attorney General Accuses Bank Of Scotland Of Committing Mortgage Fraud

John Larkin QC, Northern Ireland’s Attorney General, has accused the Bank of Scotland of committing mortgage fraud in relation to the way that the bank has treated customers who fell behind on their residential property mortgages.

An earlier court hearing had previously ruled that the Bank of Scotland had unfairly re-billed some of their own customers who had fallen into arrears with their mortgage payments.

The Bank of Scotland had decided to appeal the verdict of the earlier court hearing but decided to drop that appeal on Monday morning. The Bank of Scotland then rejected Mr Larkin’s claims, saying it strongly takes issue with the allegations.

A barrister for the bank, Stephen Shaw QC, said Mr Larkin’s view of mortgage fraud was “based on a misapprehension”.

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Mortgage Lenders Worried Help-To-Buy Will Distort UK Property Market

Mortgage Lenders Worried Help-To-Buy Will Distort UK Property Market

Help-To-Buy Controversy Continues

The latest figures released by the popular property finding portal, Rightmove.co.uk coincide with the news that UK based mortgage lenders are worried that the second phase of the Government’s Help-To-Buy scheme risks distorting the true health of the UK property market.

The British Bankers Association (BBA) is a governing body that represents all the banks that are currently participating in the scheme including those who are planning to participate in it in the future, has called for Government clarification on the proposed exit strategy from the Help-To-Buy scheme, according to a report in the Daily Telegraph.The news comes just 2 weeks before the Chancellor of the Exchequer, George Osborne’s Autumn Statement on 5th December.

In a submission to HM Treasury, the BBA said, “Some members of the BBA are participating in the Government’s Help-To-Buy scheme, but further clarification is needed on exit strategies.”

Mortgage applications worth £365 Million (GBP) have been received since the second phase of the Help-To-Buy scheme was launched on 1st October 2013, to help aspiring home buyers get a foot on the property ladder.

The Royal Bank of Scotland, NatWest, Halifax and Bank of Scotland started offering residential mortgages under the umbrella of the Help-To-Buy scheme last month and mortgage lenders representing most of the UK mortgage market have confirmed they will eventually come on board, in order to capture a share of the market.

The Government initiative makes it easier for mainstream mortgage lenders to offer higher value mortgages with deposits as low as 5% by removing some of the risk they would face if the borrower defaults on repayments, because the mortgage products are underwritten by the Government as Spotlight has previously reported.

The Government are very happy to be underwriting Help-To-Buy mortgages because they are listed as a second charge on the mortgage, increasing the Governments property assets, allowing them to borrow money against their portion of the residential properties purchased under the Help-To-Buy scheme.

At least property investors enter the property market with an exit strategy in mind, but the Government have yet to reveal how they intend to exit from the property market when the scheme ends. No wonder mortgage companies are worried!

Mortgage repayments have fallen by more than two-fifths in Scotland when taken as a proportion of income

 

Scotland is best place to get a mortgage

Scotland is best place to get a mortgage

Mortgage payments have fallen from a peak of 38% in last quarter of 2007 to just 22% in the final quarter of 2012, according to research conducted by Bank of Scotland.

Lower residential property prices and reduced mortgage rates have been the main driving force behind the significant improvement in affordability.

The average monthly take-home wage in Scotland is £1,954 (GBP) while the average monthly mortgage payment is just £424 (GBP).

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Families who are looking to move into larger properties are finding themselves stuck in first-time buyer flats because they cannot sell their homes or get a mortgage.

A survey by LloydsTSB found that “second steppers”, those who have a first home to sell and who want to move up the ladder, are increasingly stuck in unsuitable accommodation.

The report reveals that home affordability for Second Steppers has become much less favourable and declining house prices have led to many homeowners being in negative equity.

Second Steppers are homeowners looking to sell their first home and move up the property ladder.

Many potential Second Steppers in today’s market would have bought close to the peak of the UK property market and are now finding it increasingly difficult to get off the “first rung”.

Many bought at the peak of the market in 2007, and may have negative equity to cope with as well as a lack of buyers and difficulty meeting moving costs.

The figures show the majority of property vendors in this situation have been stuck on the property ladder for over 12 months.
Some will have had children in the intervening time and feel that they are stuck in unsuitable accommodation.

22% now believe that it is harder to move up the housing ladder than to get on it in the first place.

According to Lloyds TSB’s report,
• 61% of second steppers have wanted to climb up the ladder in the past 12 months but have been unable to do so as they face an increasing number of challenges.
• 22% believe it is now harder to move up the ladder than get on it in the first place.
• 43% also feel it will be as equally difficult.

Stephen Noakes, mortgage director of Lloyds TSB said: “First-time sellers are now faced with some very tough challenges when trying to make their next move on the property ladder and many are finding it more difficult than getting on the ladder in the first place. It is vital that this group of home movers receive more support and attention as they play an intrinsic role in getting the housing market moving again.”

A recent study by HSBC also found that as many as 360,000 home owners are unable to move up the property ladder thanks to a combination of sliding house prices and more restrictive lending rules.

Those who bought properties in 2007 before the housing crash do not now have sufficient equity in their homes to trade up to larger properties, according to new research by HSBC.

Although most are not yet in negative equity, they do not hold enough of their home’s value to cover the required 10% deposit on a new property and pay associated moving costs, such as stamp duty, agent fees and legal expenses.

The problem has been exacerbated because the price of many first time properties has fallen faster than the rest of the housing market.

Demand from first time buyers has waned since lenders pulled out of the 100% mortgage market.

Mortgage lenders now require buyers to put down at least a 10% deposit, and even then these borrowers will be charged a higher mortgage interest rate than those borrowing 75% of a property’s value.

Peter Dockar, the head of mortgages at HSBC, said: “Those who have bought their first home can no longer rely on rising house prices to provide them with the deposit they need for their second.”

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