First Direct withdraw all mortgages to new customers

[Addy]

First Direct stops new mortgages

Interesting for anyone considering going with the HSBC owned company - they're the first major lender to withdraw all new mortgages to non-customers (though a couple of small building societies did it last month)

The reason is also interesting, it's because they're getting 5 times normal business and can't cope with demand. That makes a change from the reason many lenders are withdrawing products which is that the credit crunch has made them unviable. It just aint good news for those looking to renew their mortgage this year, or those like me who may need one this year year.

What a time to be a first time buyer eh?

[crusher]

They only did it because they were afraid the government would look into their scandalous practices and slam them for overselling and for selling to obviously broke people who overstated their earnings.
I would bet any money that they got told on the old boy network that there was some kind of investigation coming and they need to clean up their act - thats usually the only reason banks self regulate is if the gvt threatens them

[Addy]

Originally Posted by crusher

They only did it because they were afraid the government would look into their scandalous practices and slam them for overselling and for selling to obviously broke people who overstated their earnings.
I would bet any money that they got told on the old boy network that there was some kind of investigation coming and they need to clean up their act - thats usually the only reason banks self regulate is if the gvt threatens them

Eh, no they did it for the reasons stated.

Also, the FSA while perhaps not the most competent regulatory body in existence aren't too bad really, and certainly they are already hitting the banks pretty hard about credit rules and the like. The fact that the second Basel accord is still going through the wringer just now means that certainty as to bank liquidity regulations is hard to find, a lot of that could change once the Accord is finalised.

The UK financial services market is pretty damn heavily regulated actually, especially since the banks are hit from an increasing number of angles as the FSA gains power from the government and the Bank of England. I'm not denying there's a good deal more to do, but the banks have a HELL of a lot to lose out of recent events, so can hardly be accused of not self regulating with their attitude to mortgages and things like this. Ok, question the motives, but what they are doing is for the best.

EDIT: By the way if you overstate your earnings when applying for a mortgage that's your fucking problem not the bank's - utmost good faith is a basic contractual principle of insurance and it applies here too. Lying on a contract ain't smart and it ain't the lender's fault if you're trying to take them to the cleaners for it.

Can you actually offer a single shred of evidence for anything you've suggested?

[Addy]

Oops ignore what I said about Basel II that actually has gone through now. The rest of it I stick by though.

[JennyPiccolo]

Are they withdrawing mortgage agreements in principle, or mortgage agreements? i dont get it.

[Addy]

Originally Posted by JennyPiccolo

Are they withdrawing mortgage agreements in principle, or mortgage agreements? i dont get it.

They're not going to sell anymore mortgages to non-First Direct customers for the time being.

Existing mortages aren't affected in any way, and if you have other banking business with First Direct I believe you can still get one. All mortgage products are affected, though it will presumably only be for a few months until the back log clears up.

[LesMTS]

Originally Posted by Addy

EDIT: By the way if you overstate your earnings when applying for a mortgage that's your fucking problem not the bank's - utmost good faith is a basic contractual principle of insurance and it applies here too. Lying on a contract ain't smart and it ain't the lender's fault if you're trying to take them to the cleaners for it.

Similarly, if a bank sells to someone who has obviously overstated their earnings, or the bank hasn't carried out the correct checks to verify that provided details are correct, they should be taken to task.
I can understand how someone can be naive and foolish and overstate their earnings to get a bigger mortgage. Yes, it's daft. Turning a blind eye and okaying the mortgage, however, is evil and predatory.

[Largest of Gregs]

Originally Posted by JennyPiccolo

Are they withdrawing mortgage agreements in principle, or mortgage agreements? i dont get it.

Don't worry, I shat it annol when I first read

[Addy]

Originally Posted by Largest of Gregs

Don't worry, I shat it annol when I first read

The clue is in the title - "new" customers.

[Largest of Gregs]

I'm a new customer. Only been with a few months.

Get over it

[Kenny Everett]

The fact that it says "withdraws to new customers" indicates that the new customers have something removed from them. It should really be phrased " declined to potential new business" or something.

Greg wins at life