A quick personal note to thank all clients, industry colleagues and friends who expressed sympathy with me in various ways on the death of my father, Denis Ferguson on 21st October 2008. Your support is greatly appreciated.
Dad was very ill for some months and particularly so in the last few weeks of his life, so I suppose we were as prepared as we could be. But nothing prepared me for the overwhelming sadness I felt when he eventually died, or how much I miss him even after just a few short weeks.
That said, I feel lucky to have enjoyed a great relationship with Dad and how long I did have with him, given that he was unusually old when I was born. The fact that he lived to see and know all his five grandchildren was also a bonus. I'm tremendously proud of his many achievements in life and the very positive influence he had on mine.
Wednesday, 10 December 2008
Government's sub-prime lending
I had a look at the Government's new Home Choice Loan initiative. Mortgage brokers were invited to apply for an agency to arrange these mortgages on behalf of clients for commission.
Frankly, I think the whole scheme is a bad idea. One of the conditions that a customer must meet before applying for one of these loans is that they can "provide evidence via a broker that they could not obtain sufficient finance from two banks or building soceties".
Let's be clear - if two banks or building societies decline you for a mortgage, it's because they don't think you can afford it, or might have trouble affording it in the future. You might want to take heed of that and wait until a property comes along that you can afford.
The Government is effectively becoming a sub-prime lender. Such lenders specialised in offering loans to people who had been declined by "High Street" prime lenders. We have seen that sub-prime lending in the US was a major contributory factor to the current credit crunch. Why on earth would the Government be entering this market now?
We decided not to even apply for an agency to distribute these loans on behalf of the Government, on the principle of it.
Frankly, I think the whole scheme is a bad idea. One of the conditions that a customer must meet before applying for one of these loans is that they can "provide evidence via a broker that they could not obtain sufficient finance from two banks or building soceties".
Let's be clear - if two banks or building societies decline you for a mortgage, it's because they don't think you can afford it, or might have trouble affording it in the future. You might want to take heed of that and wait until a property comes along that you can afford.
The Government is effectively becoming a sub-prime lender. Such lenders specialised in offering loans to people who had been declined by "High Street" prime lenders. We have seen that sub-prime lending in the US was a major contributory factor to the current credit crunch. Why on earth would the Government be entering this market now?
We decided not to even apply for an agency to distribute these loans on behalf of the Government, on the principle of it.
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