Santander, the Spanish financial conglomerate which has significant exposure in the UK, recently announced it was behind 20% of all mortgages written in the UK during the first three months of 2010. This is a significant increase in business and bodes well for the future of the Spanish giant which has exposure to the UK via its Abbey and Alliance and Leicester operations. It seems as though the decision to rebrand many operations under the Santander banner has paid dividends, at least in the short-term.
News that the Financial Services Authority (FSA) has widened its investigation into Northern Rock and reporting irregularities regarding mortgage arrears is a devastating blow for the company. This comes at a time when the UK government is looking to spin off the operation after splitting the company into a "good bank" and a "bad bank". It does not reflect well on the UK government that it has taken so long to get to the bottom of the reporting irregularities and indeed the investigation is not yet finished.
There is widespread speculation that the SEC is chasing Goldman Sachs regarding an alleged $1 billion fraud lawsuit because it believes that the deal involved actually brought down the worldwide economy and precipitated the credit crunch. This is a rather major assumption on behalf of the regulator as many in the market place believe the US sub-prime mortgage market pushed too far too quickly and every mortgage company in the sector was chasing the next big buck.
The Council of Mortgage Lenders (CML) has today confirmed that there will be a £300 billion funding shortfall in the mortgage market as a number of government backed financial initiatives come to an end. In the boom times the mortgage market in the UK more supported by various mortgage derivatives although this particular area of the investment arena has stalled of late and is yet to kickstart despite other areas of the market picking up.
Despite the fact that UK mortgage lending was up 24% between February and March the Council of Mortgage Lenders believes that the mortgage market is still "quiet and subdued". The £11.5 billion of mortgage finance paid out in March is an increase on the £9.3 billion a month earlier although only a small rise on the £11.2 billion 12 months ago.
The Financial Services Authority (FSA) has broadened its investigation into Northern Rock to see whether any other figures in the company were aware that mortgage arrears figures were not reported correctly to the FSA. This comes at a time when the UK banking industry is again under the spotlight with revelations appearing in the public domain regarding various practices before and during the recession.
Yesterday's revelation that key executives at Northern Rock allegedly failed to disclose details of around 2,000 mortgage accounts which were in arrears, in hindsight, may have been the start of a difficult period for the UK banking sector. Even though it is unlikely that the credit crunch and following recession could have been avoided there is some concern that the nature of the UK banking crisis may have been somewhat different if early warning signals had appeared.
The Council of Mortgage Lenders (CML) has today confirmed that mortgage agreements in February increased by 12% compared to January although the increase was 49% compared to February 2009. The value of loans agreed in February was also significantly, 9% up on January and a very impressive 67% up on February 2009. So what does this mean for the UK mortgage market?
David Baker, the former Deputy Chief Executive of Northern Rock, has today been fined £504,000 after admitting that he omitted data regarding 2,000 customers who fell behind on their mortgage payments. The vital data, which showed Northern Rock customers behind on their mortgage payments, was effectively incomplete and resulted in misleading statements being made to the UK financial markets and to the Financial Services Authority.
Kensington Mortgages, one of the U.K.'s leading sub-prime mortgage lenders, has today been hit with a fine of just over £1.2 million by the Financial Services Authority (FSA). This goes back to an earlier FSA investigation into the company's handling of customers in arrears and the ruling that three different types of fees charged against those in arrears were unfair or excessive. The company has not only been fined £1.2 million but it has also been ordered to pay back £1.1 million in excessive fees to those customers who were in arrears.
