Brokers' anger as Ulster cuts commissions by half

We no longer require your services as we won’t be lending as much money as we have done in the past…

Brokers’ anger as Ulster cuts commissions by half

Too right. Why would UB lend risky mortgages (given the outlook for house prices) when they can keep their capital and lend it over-night at LIBOR/EURIBOR ++?

Competitive pressures I guess. If they tried to pass on as say an added 0.1pc in margins they would be uncompetitive. How far are the others going to be behind them?

Sure every second entrepreneur coming out of Ireland these days is a mortgage broker – too many mortgage brokers to go around I’m afraid. The banks are merely taking advantage of the competitive market.

surely this will just push business away from Ulster Bank and onto their competitors??

Also how can a mortgage broker be called an entrepreneur?? They haven’t invented something? More like rehashing a succesful business model

or maybe pass the savigs on in lower margins than would apply otherwise, which is what it appears Ulster are trying to do here.

Mortgage broker = old rope processor.

=> in => old rope => out => money

Not neccesary to invent anything just to assume risk.

Yes, because most consumers have no feet and therefore are incapable of voting with them…

Thank God for brokers - we’d be a lesser society were it not for them protecting us from the evil profiteering banks…!!!

from Goodbodys

A few weeks ago HBOS - halifax said it was giving up chasing market share. New focus on quality.

RBS - Ulster will follow the same strategy.

The credit crunch has changed the game completely. IMO it looks like banks are abandoning low margin mortgage business.

This market only existed on “bank as an agent” strategy with the mortgage books been sold on. It will take a few years for mortgage books to be of value to purchasers and the margins they will demand will be higher.

This means alot of banks will pull back to quality in the mortgage market with higher pricing all round. Mortgages costs are going up for everyone.

Anyone on a interest only mortgage / 100% mortgage is going to get clobbered in 2008 and probably 2009. They may be looking at a full 1% in their mortgage costs or more.

For brokers…the banks do not want their business any more as there will be more customers than banks want and pricing power is now with the banks.

This will take out a huge amount of potential buyers from the market. Most of the FTBs I would suspect. “pull back to quality” means - only lend to people who want to trade up and only FTBs with big deposits. This was the banks can reposses your house and get ALL their money bank. No risk banking, bloody great.
The faster the victious circle spins the more it pulls in.

This will take out a huge amount of potential buyers from the market. Most of the FTBs I would suspect. “pull back to quality” means - only lend to people who want to trade up and only FTBs with big deposits. This was the banks can reposses your house and get ALL their money bank. No risk banking, bloody great.
The faster the victious circle spins the more it pulls in.

To be clear Halifax made that comment about UK mortgage but it applies equally here.

Any mortgage with LTV > 80% is now sub prime in the new post credit crunch world. Anyone in that category could see a big jump in mortgage costs when remortgaging.

This is the way it was up to 2002. High LtV equal high cost as high risk

Would anyone want their pension fund to be buying mortgages books with 100% LTV without a discount from the banks ? This is the core of the problem

From the Times today

"A revival needs a ready supply of mortgages. But, after the sub-prime scandal, banks are being a little Scrooge-like with even creditworthy home-loan applicants. Anyone seeking to borrow £500,000-plus can expect a penalty in the shape of an arrangement fee of as much as £10,000.

High interbank lending rates are evidence of the reluctance of distrustful banks to lend even to each other. Estate agents say that the Bank of England must intervene to ensure that competitively priced mortgage funds become much more easily available "