uk homeowner loans: uk

The former HSBC North America boss parachuted in to clean up the Co-op Bank has been dragged into a scandal in the US – just days before he starts his new role.
The New York Attorney General yesterday filed a lawsuit accusing HSBC’s US operation of ‘brazenly ignoring state law’ when repossessing the homes of cash-strapped Americans.
Although no individuals at HSBC are singled out, the alleged wrong-doing coincides with Niall Booker’s tenure as chief executive of HSBC North America from August 2010 to October 2011.

Prior to that Booker was chief executive of HSBC Financial, where he was put in charge of the clean-up operation following HSBC’s toxic takeover of sub-prime US lender Household.
Part of his job was presiding over the repossession of homes from families who took out high risk loans they could not afford to repay.
Under New York state law homeowners who have fallen behind on their mortgage repayments and face the threat of repossession are entitled to a hearing with the lender.

This provides them with the chance to push for alternatives, such as changes to their loan repayments to allow them to keep their homes. But HSBC is accused of forcing homeowners to wait for months and even years to lodge their appeal.
Yesterday New York Attorney General Eric Schneiderman said ‘companies like HSBC are brazenly ignoring state law, leaving homeowners across New York stuck in a legal limbo’.
An estimated 25,000 New York families are trapped in the backlog, according to records.
Schneiderman has filed a lawsuit in the New York Supreme Court forcing HSBC to pay damages and refund fees and interest.
The lawsuit is embarrassing for HSBC, which is still reeling from last year’s £1.2billion fine from US regulators for money laundering.
But it is also an unwelcome distraction for Booker, who takes the helm at the Co-op Bank next week.
He will have to grapple with an estimated £1billion black hole in the lender’s capital buffer which prompted Moody’s to downgrade it to junk status last month.
This came just weeks after it pulled out of a £750million deal to buy 632 Lloyds branches.
In good news for the Co-op, just over 95pc of Royal London members passed the board’s deal to buy the Co-op’s life insurance and fund management businesses for £219million at an extraordinary general meeting.

Homeowner ambitions to move up the housing ladder are being curtailed by negative equity, new mortgage figures suggest.

According to the Council of Mortgage Lenders in Northern Ireland, just 800 loans were given to borrowers moving house in the first quarter of this year, down from 900 in the first quarter of 2012 and 900 in the fourth quarter of last year.
CML said lending to first-time buyers and those looking to remortgage also fell in the first quarter, though that reflected seasonal trends, according to the council.
Around 1,200 loans were advanced to first-time buyers in Northern Ireland in the first quarter, a seasonal drop of 14% compared to the fourth quarter of last year and a fall of 8% compared to the first quarter of 2012.
Average house prices have slumped around 56% from their peak of around £240,000 in 2007 – and while good news for first-time buyers, the falls were not helping potential home-movers.
A spokesman for the CML said: "While steeper house price falls in Northern Ireland have helped first-time buyer activity, home movers have seen a reduction in their housing equity, decreasing the deposit available to them to put towards a higher-priced property further up the housing ladder."
Just 40% of home purchase loans in Northern Ireland in the first quarter of the year were for home movers, compared to 56% in the UK overall.
Ulster Bank chief economist Richard Ramsey pointed out that at 1,000, the quarter had seen the lowest number of remortgages since CML remortgage data began in 2005. That compared with a quarterly peak of 8,700 in the second quarter of 2007, when house prices were also peaking.
Mr Ramsey said: "This is not really surprising given the average house price falls of 55%+ that have already occurred.
"For many households this has significantly eroded the equity previously held within a property. As a result, many households are not in a position to remortgage their home to fund improvements or extensions or they are reluctant to do so."
Home-movers were not reaping any benefit from the activity at the bottom of the market, he said, suggesting first-time buyers were buying new-builds.

The fall on the same period one year ago could also be due in part to the end of the stamp duty holiday in March last year, CML said.

Former chief of HSBC US division embroiled in homeowner scandal just days before starting new Co-op Bank job :

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