Haven move LTV’s lower

The EBS distribute through brokers via their subsidiary ‘Haven Mortgages’, the EBS have thoroughly debunked the idea that mutuality means anything by charging their existing clients different rates than new clients. They have also failed to be in the driving seat for a ‘third force’, going it alone has not happened, remaining an independent entity has failed, and the likelihood of private equity getting involved will most likely hinge upon state support being part of the package, thus it seems that institutional buyers will be the only serious suitors.

It is in an environment such as this that costs should be most seriously addressed, they have done this with Haven, slashing commissions and workforce, getting the organisation lean, but thus far EBS have failed to pursue efficiency with the same zeal within their own camp, and this zombie-like bank/mutual/whatever, is now reducing LTV’s for the only efficient part of the operation, Haven will now only offer a maximum of 80% LTV to potential clients, leaving 90% loans with the least effective arm of the organisation, the agent network.

It is …

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Why aren't mortgages MORE expensive?

In looking at any product or service you will often hear people mention ‘supply and demand’, it is one of the foundations of Microeconomics.

Generally if supply increases prices drop, if it decreases prices rise. By how much is a question of how elastic the demand is versus supply.

We know from our day to day experience that there is still a high level of demand for mortgage finance, charting our figures back to 2005 has shown us that if we take out ‘noise’ of m/o/m figures that demand is still at relatively high levels.

However, we also know, from our daily interactions with banks that criteria is getting harder, conditions more restrictive, underwriting is more forensic, the supply of mortgages is decreasing rapidly.

Using a simple chart you would get something along the lines the one below, the blue supply and demand lines show  the situation at a certain point in time, we’ll say that is a year ago, the green line of supply shows the current situation – it has moved to the left because of the decrease.

…

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Why aren’t mortgages MORE expensive?

In looking at any product or service you will often hear people mention ‘supply and demand’, it is one of the foundations of Microeconomics.

Generally if supply increases prices drop, if it decreases prices rise. By how much is a question of how elastic the demand is versus supply.

We know from our day to day experience that there is still a high level of demand for mortgage finance, charting our figures back to 2005 has shown us that if we take out ‘noise’ of m/o/m figures that demand is still at relatively high levels.

However, we also know, from our daily interactions with banks that criteria is getting harder, conditions more restrictive, underwriting is more forensic, the supply of mortgages is decreasing rapidly.

Using a simple chart you would get something along the lines the one below, the blue supply and demand lines show  the situation at a certain point in time, we’ll say that is a year ago, the green line of supply shows the current situation – it has moved to the left because of the decrease.

…

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The risk of mergers to consumers

There is much in the news about private equity firms and various banks being ‘in talks’ about how they may work together (translation: some type of potential merger of parts of the business or total merger). Every bank seems to be in the spotlight right now and rumours are rife while fact is thin on the ground.

Every headline of every paper carried a bank story today, it is almost like society has moved from its fixation with property to a fixation with banks and their core tier 1 capital. If we mentioned Basel II accord a year ago people would look at you funny, today that and other terms akin to it are entering daily discussion at an alarming rate.

There is (as of today) no certainty that banks are going to merge, fail, succeed, or do anything other than what they normally do, however, if we were to make an assumption that at least three or four banks were to merge …

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