RBS who are now facing the biggest loss in British history say their stocks have jump by 13 per cent, this was thanks to a pledge from Barack Obama’s nominee treasury secretary, Timothy Geithner that he will be expanding their prolonged role in helping to stabilize banks.

Royal Bank of Scotland shares rose by 13% to 14.1 pence; Barclays Plc who turned down government help gained 6.8 per cent to 70.6 pence, and Lloyds Banking Group Plc increased by 15 per cent to 51.7 pence.

Since Geithner’s pledge to help expand and prolong U.S. Government help, the FTSE All-Share Banks Index rose 4 percent. Geithner plans to help stabilize banks, this will in turn help ensure credit for those all-important small business.

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Once the House of Representatives failed to pass the bailout bill investors hit back hard and not in a good way. Most of the major U.S. stock indexes plummeted on Monday, in what is thought to be one of the worst sessions ever.

The Dow industrials fell 5.4%, the Nasdaq plunged 9.1%, and the S&P 500 fell 7.8%. This is the biggest closing for the Dow in point’s terms. This has also had an effect on the Crude oil futures, as it has sank. Gold futures have risen.

Read more at Business Week

Consumers have been taking advantage of high saving rates at UK building societies; the new saving accounts grew by two-thirds in the first half of 2008.

In the first 6 months of 2008 Building societies had total savings of 6.3 billion; this is up 63 percent from 3.86 billion pounds for the same period in 2007. This is according to BSA data.

Lender have had to reduce their dependence on wholesale funding during the credit crunch, so they have done this by offering higher saving rates to attract new deposits.

Due to the poor economic climate people are being more careful with their cash, and are spending less and trying to save where they can. This becomes apparent from HSBOS and Lloyds TSB as they have both seen an increase in new saving accounts.

Customers are playing it safe and opting for saving accounts rather than gabling on the stock market.

There has also been a 60 percent decrease in mortgage lending reported by the BSA, Net lending for the first half of 2008 was 3.45 billion pounds, compared with 8.43 billion pounds the same period in 2007. This has all had a knock on effect on the housing market and has ended the 10 year property boom that homeowners and investors have enjoyed.

Source: Guardian

Read more about UK finance here.

Yorkshire Building Society has said that they are responding to the needs of their consumers, which is why they are offering products with lower payments, perfect for this current credit crisis.

The new lower mortgage rate will be 4.99% however; this comes with a higher fee of 3%, this product has been designed for borrowers who wish to keep their monthly rates down.

Mortgage product manager at Yorkshire, Tom Girling has said “We understand that this mortgage will not suit all borrowers, but it is offered as an option for those who may be finding that their monthly income is stretched to the limit. For borrowers who can afford a little more each month, we have mortgage options with lower fees and no fee products.”

Yorkshire Building Society has also lowered their rates by as much as 0.5% on a rage of their products, from

Yorkshire has also cut rates by as much as 0.5% on a selection of two-year, three-year, five-year and ten-year fixed rates.

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Robert K. Steel, President and CEO of Wachovia said “I want to personally thank Tom for his many contributions to Wachovia.” He also added “Tom has been a professional partner and colleague and we are grateful for all he has done for the company.”

Wurtz said “I’m honored that I had the privilege to serve Wachovia as CFO for the past two and half years and as Treasurer for seven years. Wachovia is an excellent company with a very bright future. In the past few weeks, I have enjoyed working with Bob. His strong leadership will help the company build on its core strengths and emerge successfully from the current environment.”

Wachovia have assets of 812.4 billion and market capitalization of $33.5 billion, as of June 30 2008. Read more news on Wachovia.

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Despite the recent collapse of IndyMac, analysts still maintain that the banking system is still in better shape than it was during the S&L crisis.

CNN Money has said that there won’t be nearly as many bank collapses as there were in the late 1980s and early 1990s. In 1989, 534 institutions failed, this was just before the peak of the savings & loan crisis. In that period over 1,000 institutions had shut up shop.

IndyMac is just the fifth bank to fail this year, so it shows that things are nothing like they were back in the 1980s and early 1990s.

However; one thing that we have to remember, the failure of IndyMac is the largest collapse of an FDIC-insured institution since 1984. The bank had assets of $40 billion and with the current Fannie Mae and Freddie Mac problems; this current period is set to be an expensive one.

In the balance sheet it is expected to contain details about the level of debt that Northern Rock owes. According to financialadvice.co.uk, they believe that the figures will show that groups has increased payments, also that the Bank will be down about £19 billion.

Most of the interest in this Bank of England balance sheet will be centred on the £50 billion bail out of the UK bank system earlier this year, there is also speculation that this could be extended.

Once the balance sheet has been released you will hear the City working away looking at figures that Gordon Brown gave us over strict borrowing ratios.

One thing is certain; the balance sheet is not going to be a boring read, well not if you want to know how much we have had to pay out just to rescue Northern Rock.

However; this is not the case, we know that houses are getting cheaper but taking out a mortgage is now more expensive than ever, firstly interest rates have increased along with increased mortgage lender fees.

One of the major problems that first-time buyers face is the death of the 100% mortgage, so if you have no deposit, then you have no way of getting on the property ladder.

The current credit crunch is now taking a firm hold on the housing market and this means that the next victim could be the 95% mortgage, just take a look at all the current deals, try and count how many of them are for a 95% mortgage.

Some of the best deals to be had are those that require at least 25% deposit, and that is the major problem, how many first-time buyers do you know with that kind of money to put down as a deposit on a house.

Nasir also submitted seven false mortgage applications as well as withholding information from the FSA investigators, who was not told about County Court Judgment (CCJ) that had been made against her in 2005.

This is the first time that the FSA has taken the steps to ban as well as fine a broker for fraud; they have said that they hope that this six figure sum will send a message to any potential future mortgage fraudsters.

The FSA has banned a number of brokers this year in connection with mortgage fraud; it seems that brokers are now facing a difficult time to reach their targets, which is why some decide to take it upon themselves to do anything to achieve a sale.

Last year the FSA made a commitment to increase fines in the retail sector, in the hope that this would act as a deterrent, this recent fine and ban is yet another big step in dealing with mortgage fraud.
Sadia Nasir’s £129,000 fine consists of £100,000 penalty and the other £29,000 is for disgorgement of illicit profits.

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Home Buyers’ Advisory Service are based in London and are an independent mortgage adviser, this new deal means that they will now have exclusive rights to offer a choice of mortgages to Simplyzigzag.com members.

These members will now have a choice of mortgages from over 120 lenders; this will offer members the best choices possible for Simplyzigzag.com’s users.

A range of products are available from the company, these include mortgages, buy to let mortgages, re-mortgages as well as income protection and critical illness. Building and contents insurance are also two other products available.

Once you start the process, the Home Buyers’ Advisory Service will then guide you through a step-by-step buying process, this makes like easier as all the jargon along with the different mortgage options are explained in easy terms.

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