These mortgages are also sometimes referred to as ‘liar loans’ and this is because officials believe that because the income of the borrower is more difficult to determine the borrower is able to over-exaggerate earnings in order to boost the amount that they borrow. However, the concerns of the FSA include the higher risk of these borrowers over-burdening themselves and ending up with a mortgage loan that they cannot possibly afford to repay. This is why the regulator has been seeking a ban on these loans.

However, according to recent reports the banking industry is seeking to fight against a ban on these mortgages, with some bank officials claiming that it penalises self employed people and make it impossible for them to get a mortgage in order to buy a property. Whilst the FSA has received some praise for its overhaul of standard in the banking sector this is a proposal that has been met with mixed reactions and could have a profound negative impact on those that are self employed.

One industry report stated: “Respondents were concerned that the proposal would impact negatively on the self employed, trigger an increased use of fraudulent income documentation and increase lenders administrative costs. Some respondents also believed the market has already adjusted by withdrawing self-certified products and, therefore, regulation is no longer required.”

Banks may fight against ban on self certification mortgages is a post from: Nicon Debt Management

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According to reports lawyers believe that some credit card firm may be frightened of the clauses coming to light, resulting in customers taking legal action against them.

The base interest rate has now been at an all time low of just 0.5 percent for one year now, and this is something that will have pleased many borrowers.

However, despite this rock bottom base rate the gap between the base interest rate and the average credit card interest rate has been increasing, with credit card interest rates reaching their highest levels in well over a decade according to recently released data.

The average rate of interest being charged on credit cards has now exceeded 18 percent, and this something that could financially cripple already struggling borrowers.

One lawyer who looked into this issue stated: “Bank executives are terrified that someone might take this to court and win, opening the floodgates for millions of other card holders.”

”In a test case in 2001, a court established that the lender would have to show they had not acted unreasonably. But the 2008 change brought in a rule preventing lenders imposing an ‘unfair relationship’ with their borrower”

”The old curb on credit charges said consumers could only contest them if they were ‘extortionate’. The onus has moved to a situation where it’s up to the card provider to prove they are not being unfair – and there appears to be a strong argument they are when the base rate is so low.”

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In the budget Darling announced a number of measures, including suspension of stamp duty for first time buyers on properties up to £250,000, and an improved income verification system for use by lenders, which would be established by HM Revenue & Customs.

However, a number of industry officials have hit out at the proposals stating that they show a clear and continued lack of understanding of the mortgage market in the UK by the government. One analyst from the company John Charcol slated the approach on stamp duty, stating that it was unfair because it gave first time buyers an unfair advantage over other buyers, and that it should have been extended to all buyers not just first time buyers.

He said: “It would have been much more sensible to increase it for everybody. What will now happen is that first-time buyers will actually have an advantage over non-first-time buyers for properties between £125,000 to £250,000. A lot of people might say that is fine but I don’t think it is as simple as that. What about second-time buyers who will be in a worse position?”

Another industry official said that the HMRC income verification check was a flawed idea, because the income details that the Revenue Service kept were around nine months out of date. This would mean that someone that applied for a mortgage and had been recently made redundant could still end up getting a positive verification. He also said that the checks and verifications on income would take far too long.

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The original limit on these cards was just ten pounds, but this can be quite restrictive for many cardholders.

The credit and payment card giants Visa and Mastercard have recently made a request for the transaction limits on these payment cards to be increased, and both providers and the banking industry have agreed to raise the transaction limit by 50 percent from ten pounds to fifteen pounds per transaction.

Whilst this is still not a large amount it bring the limit more in line with those seen across the rest of Europe.

Contactless cards have been designed to provider convenience and ease to cardholders, as they can make transactions on the cards quickly and conveniently without the need to provide a signature and put in a PIN.

The transactions are made by tapping the card on a specialist machines that are installed by shops and businesses that want to use the technology.

It is estimated that one in every seven adults will have a contactless credit card by the end of this year, and the technology is quickly catching on amongst both consumers that want to save themselves time and retailers that want to speed up transactions for smaller value items.

A spokesperson for Barclay’s said: “Contactless technology is undoubtedly the future of payments and we are seeing it grow hugely in popularity.”

”The new higher limit gives customers the flexibility of paying for even more transactions quickly, securely and conveniently via a contactless card payment and will lead to more retailers implementing the technology.”

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The Chancellor of the Exchequer, Alistair Darling, recently announced in the pre-election budget speech that first time buyers would now be able to avoid paying stamp duty on properties up to the value of £250,000, which is double the standard exemption value of £125,000, which applies to other buyers. Darling also announced that in order to fund this new measure wealthier people that were buying homes worth £1 million or more would have to pay increased stamp duty of 5 percent, which would mean a minimum stamp duty of £50,000.

The Right Move research showed that out of the homes on the market at present only 2 percent fell under the price category of £1 million or above, so only a small percentage of buyers would be affected by the increased stamp duty rate whereas many first time buyers would benefit from the increased threshold for stamp duty exemption.

An official from Right Move stated: “This welcome initiative removes the majority of properties for sale from the clutches of a somewhat restrictive tax for the UK property market, giving a welcome boost to the important spring market. A massive 70% of properties for sale are now tax-free for first time buyers. However, sellers may feel they have to negotiate less with a buyer who is now a couple of thousand pounds better off, which could blunt the benefits of this stamp duty holiday.”

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The new measures form a combination of the proposals that were put forward by the government and proposals that were put forward by lenders. The government had put forward a range of proposals originally, but the credit card industry defended some of its methods with a lengthy report to respond to those proposals.

Whilst the package of measures does not go quite as far as some industry officials may have hoped they do provide some additional protection and flexibility for credit card users.

There had been talk of the minimum repayments being increased for credit cardholders but there was concern that consumers would struggle to manage, especially if they had more than one credit card.

However, lenders will have to charge new account holders a minimum of 1 percent of the amount spent, plus enough to cover any fees, interest, and charges.

The Consumer Minister, Kevin Brennan, stated: “In our consultation it was made quite clear by consumers that they might not be able to manage their current debts if they had to pay off more each month. People with several cards would have had less flexibility to deal with their debts.”

For this reason existing cardholders with balances on their cards will continue to make the minimum repayment requested by their individual lenders.

A number of measures have been put into place as part of the proposals, which are expected to come into play at the start of next year.

This includes a ban on increasing credit limits for those with financial problems, a sixty day period for cardholders to reject any increase on their existing debts, and the opportunity for cardholders to opt out of interest rate increases.

Those that want to reject increases will have to close their accounts, but will be given reasonable time to clear the balance by their lender.

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The bank has created what has been described as an ‘apartheid’ type system, where better off customers will be dealt with by staff at call centres based in Britain but less well off clients will have to put up with overseas call centres, which can sometimes lead to problems when it comes to communication.

It is thought that thousands of the banks’ customers will be forced to deal with people in Indian call centres, where often lack of understanding and communications problems can cause frustration and problems, whilst more affluent customers will be able to enjoy the ease of being connected to a UK call centre to have their query dealt with.

It is thought that those with a lot of savings or those that are able to borrow at least £500 from the bank and buy its products will be the lucky ones that are able to deal with a UK call centre.

Barclay’s is hoping that by creating this filtering system and allowing only those that can buy its products to go through to a UK call centre its UK employees can try and make sales of products to customers that are put through in the knowledge that they are eligible to take the products should they wish to do so.

An official from Barclay’s said: ‘Before we’ve had people ringing up who have been overdrawn, so we haven’t been able to sell them anything.’

The system is already being tested according to reports and could be put into place from the start of April. Barclay’s stated: ‘Customers will speak to different teams in different locations depending upon the nature of their query.’

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The report forms part of the Office of Fair Trading enquiry into costly credit, and will include things such as pay day loans, doorstep lenders, and pawnbroking, all of which have been subjected to increased scrutiny, but the topic of bank charges has only be skimmed over as part of the report.

The report from the OFT enquiry is set to be published next month, according to reports, but some of the lenders that have been included in the report have described it as a ‘witch hunt’.

Providers of pay day loans have expressed disappointment with the OFT’s decision not to cover bank charges and instead focus on pay day loans and other types of credit.

The report, when released, it expected to highlight the astonishing levels of interest that can come with some types of borrowing, with some non-mainstream lenders charging up to 500 percent interest on a one year loan and some pay day lenders’ interest rates working out to between 1000 and 2000 percent.

At the time the OFT started into probe into high cost borrowing it had been expecting to win its High Court case against the banking industry with regards to bank charges.

One industry group, the BCCA, said that bank charges should have been included in the report, and the group said: ‘We are disappointed that the OFT will not be carrying out a thorough examination of the true cost of current account overdrafts.’

‘This is particularly significant, because the banks are exempted from having to quote APRs on overdrafts, whereas other short-term lenders are compelled to do so.’

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The social care payment cards will enable users to benefit from maintaining independence, so that they can pay for thing such as leisure services and social services themselves through the use of the card.

The new payment card is called the ‘Empower Card’. The card will enable the elderly and disabled in the area to enjoy more independence and pay for services themselves. The scheme has just been launched by the council, and officials believe that it is the first scheme of its kind in the UK.

Social care money was previously paid into the recipients’ bank accounts, but now consumers will have the option to have the money loaded onto a pre-loaded Visa card.

One resident in the area said that she is the first to be receiving one of these payment cards, and said that she can now use it to pay for the services of three staff members to act as assistants to her daughter, who suffers from both emotional and physical problems.

She said: “It has changed both mine and Victoria’s lives for the better. It’s given us both so much more flexibility. It’s freed up lots of time for me, so that I can actually go out to work which is great. It’s a very forward-thinking system which is what attracted me to the card in the first place. I would definitely recommend it.”

Any of the residents that are receiving social care from Cheshire East council will be able to apply for the card, although they can still have the money paid into their account should they prefer to do so.

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Whilst getting into debt is unavoidable for most of us it is possible for those that are struggling with their debts to take action to try and ease the situation. The measures and options that are available to you will depend on a number of things, such as your personal situation and circumstances to the level and type of debt that you have. It is a good idea to look at the various options that are open to you, as some resolutions will work more effectively than others.

Over the past couple of years in particular many people may have found themselves deeper and deeper in debt, with financial problems having affected their finances to the point where they have been living on credit. Being in debt so deeply can really drag you down, and this is why it is so vital to take action as early as possible in order to get things sorted out with your finances and ease the stress that debt can cause. Some of the many solutions available are outlined below:

Consolidation: Consolidating your debts can prove to be one effective option for those that want to try and reduce their monthly repayments and make their debts more manageable.

This is an effective solution for those that have a range of different unsecured debts such as credit cards, loans, overdrafts, etc. In order to get a good rate on a consolidation loan you will need to have a pretty good credit rating, but if you are able to get this type of loan you can wrap up all of your other debts into one, cut the number of creditors that you are dealing with, and reduce the amount that you are paying out each month.

Debt management plans: If you are in a situation where your debt repayments are taking up a large chunk of your income, leaving you short of money for other essential payments, it is worth considering a debt management plan. There are various debt charities and agencies that can help to set these up, and you should find one that does not charge a fee.

Under a debt management plan you could reduce the amount that you are paying to each creditor by a significant amount and simply pay over a longer term until it is paid off. The interest on your debts is often frozen under these plans, and you usually make one payment to the debt management company which will then distribute the payments to your creditors.

IVA: If you are really struggling with your debts, you have over £15,000 in unsecured debts, you or your partner is working, and you meet the necessary criteria you may be eligible for an IVA.

This is known as a softer alternative to bankruptcy, and is not something that should be taken lightly to escape debt. However, for some people that have no other option it can be an effective solution, and in most cases you will pay a reduced monthly payment to be distributed amongst your creditors for five years, after which time the remainder of your debt will be written off.

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