Welcome to the newsletter from HomeLoan Partnership, designed to keep you up to date with topical market news, sales ideas for your business and developments in the HomeLoan Partnership proposition.

At last it seems that there is some evidence that rates are softening on the run up to year end. This is either a sign that lenders are having to get more competitive for the lower levels of business around or perhaps that they are trying to meet their own year end lending targets after deliberately restricting lending earlier in the year.

As a network we have seen evidence of application levels rising fairly substantially in September on a month on month basis and it is likely that clients that could not be helped previously have become prospects with these lower rates.

This does not mean an end to the current issues as the main problem still revolves around the overall liquidity of the market and investor confidence. In the past few days we have seen Lehman Brothers file for bankruptcy protection and Merrill Lynch has been acquired by Bank of America, both having succumbed to the 'crunch'.

This week the mighty Halifax has agreed a take-over by Lloyds TSB to create a banking giant, watch this space to see how this might affect rates & products.

The financial reporting season is not over yet and it seems that the market may be waiting to hear if there is any more bad news before it normalises.

Nevertheless, it is what is happening here in the U.K. that matters to individual mortgage brokers and for the time being at least it seems that you have business to do - look back through your client banks for remortgage prospects before someone else finds them!

Some clarity was delivered over stamp duty when the decision was announced to suspend stamp duty on properties below £175,000 until September 3rd 2009. There were many thousands of people involved in chains at this moment in time that can now move forward with their move although I pity those that had agreed a sale or purchase price of, say, £185,000 or below as I would expect a degree of renegotiation to be taking place.

So who does this affect? According to figures from the CML around 215,000 purchasers would have benefited from this last year but the government has estimated that this will cost £600 million, suggesting that the number could be far higher.

Hazel Blears has announced a plan to help the housing market, in particular first time buyers and those struggling with their mortgages as follows:

• A mortgage rescue scheme to help families at most risk of repossession.
• A shared equity scheme, Home Buy Direct making £300 million available to 10,000 buyers.
• £400 million to accelerate the delivery of 5,500 homes through registered social landlords and councils.

Depending on whether you choose to believe the Halifax or Nationwide house price index, the new threshold for Stamp Duty would fall just below - or just above the average cost of a property in the UK at the moment!

Suffice to say, some buyers will benefit to the tune of £1,750 and this should have some sort of effect on their enthusiasm to buy rather than rent.

View Article -> Ensuring a fair housing market for all

It is a fact that most of the clients that you will meet will not have a Will. Some regard the problem as having been removed when the chancellor allowed a surviving spouse to use their partners' IHT allowance, thus doubling the threshold.

However, one of the primary reasons to make a Will is to dictate who gets your money when you die, and even more important, who might become guardian to your surviving children.

Without a Will, probate still determines that a surviving spouse would only receive a proportion of the estate with the remainder held in trust for the children and all the complications that that entails.

Explaining just a few of these points to a customer and providing them with a reasonably priced solution results in Will referrals. Being involved in the overall process will introduce you to executors, guardians and referrals for Wills themselves and these customers become mortgage prospects. What you might call a virtuous circle!

How do you refer Will clients? Either partner with a local Will writer or legal firm or use one of the national referral services (after satisfying yourself that they are competent).

HomeLoan Partnership provides a referral service that allows advisers to commission a full range of services from simple Wills to more complicated trust planning.

Do your clients a favour with ASU

The economy is struggling at the moment, that seems very evident by the profits warnings issued by many UK financial institutions, manufacturers and retailers.

It will only be a matter of time before this filters down into redundancies and you should be discussing this with all new mortgage prospects and your existing clients that elected not to buy ASU in the past. No doubt the 5000+ staff of Lehman Brothers in the UK would have been grateful if this had been sold.

For those of you that have shied away from this product, consider this - it is not just your clients mortgage that is at risk if they lose their job, it is common for people to drop their life assurance premiums. This leads to a risk for the client and a clawback for yourself when the client can least afford to re-instate.

How much does it cost?

Rates vary but, using a provider that most brokers have access to, Select & Protect would deliver the following premiums:

Male aged 35, insuring a benefit level of £1000 per month on a 30 day deferment.

	Unemployment Cover	Accident, Sickness, Unemployment
Select & Protect	£27.69	£35.88

Commission is up to 32.5% - £139.00 annually.

For the time being this has to be a subject that you cover with your clients when arranging mortgages for them, if they genuinely do not want his cover it should be their choice, made after receiving a price and understanding the consequences of not having it.

Diary a follow up date for protection business.

Over the past few months we have preached the value of proper protection for your clients, extending firstly to the mortgage, adding critical illness and then on to family protection.

Probably the most common reason offered by a client for not taking full protection would be that they are committing to a new mortgage and unsure whether they can afford additional premiums. It is important in these circumstances to ensure that the client accepts that a problem exists, even if they choose not to deal with it at the time.

You should then do two things:

1. Agree a diary date when you can call to check how things are going and review the protection arrangements. A diary full of reviews will give you things to do when times are slow and allows you to ask for referrals when you call.
2. Word the needs and demands letter properly to demonstrate that you have recommended full protection, qualify the cost and acknowledge that the client has declined this and that the risk still exists. Pulling punches in the letter (as long as it does not offend) is of no use to you or your clients. A typical paragraph might read:

“You have a protection need for additional life and critical illness cover beyond that agreed for the mortgage. You chose to decline this cover - at around £25.00 per month - stating that you would prefer to wait until you settle into your new mortgage payments. Without this cover in place there will be a significant reduction in income for your dependents if you (Mr xxx) were to die. We agreed to review this in the future and I would urge you to do so as early as possible.”

Note that this does not commit you to be proactive in contacting the client (in case you do not do so) but you should obviously call as arranged.

Not all of your clients will act on the review but the ones that do will enjoy better cover and you will have added another quality sale and commission.

'Health Warning' - The information in this section is intended for guideline only and you must satisfy yourself that your needs and demands letters are appropriate. The illustration for ASU is for example only.

Do not forget that the FSA have set a final deadline of 31^st December 2008 where every authorised mortgage broker must be able to evidence that they Treat Customers Fairly. Important to remember as well that this is not just for business completed from 31^st December, it must be evidenced for the current year.

If you are a Directly Authorised broker and not looking forward to the first FSA audit, or a network member that has not been advised clearly by your principal then give us a call.

HomeLoan Partnership has issued progressive information about TCF for over 12 months.

No telegram from the queen - HomeLoan Partnership has just appointed it's 100^th member firm. The network has shown consistent growth over the past 9 months and is continuing to add member firms in a measured recruitment drive. Martin cave, MD of HomeLoan Partnership commented... “ We are very pleased to reach this milestone in the development of the network, ahead of the target that we set for ourselves. We offer a great value for money package, particularly attractive in a climate where business levels fluctuate. Our size adds strength to the network proposition but we are determined to grow without sacrificing the personal service on which we have built our reputation.”