Regular readers will know that I’ve been campaigning for the regulation of sale-and-rent-back schemes for nearly a year.

This week, I read a report in The Observer about a victim to one of these schemes – and it actually turned my stomach.

The couple, Owen and Moira Martin from Plymouth, sold their home to a sale-and-rent-back company because they had £26,000 of credit card debts they wanted to pay off.

They sold it at a £45,000 loss because they wanted to be able to stay in the property as tenants.

The day after the company bought their home, the company told them the rent had gone up by £100 a month and they had to pay 11 months in advance.

The couple paid up again – meaning that, in total, they had paid the company more than £50,000 for the privilege of staying in their home.

But despite all this, a few months later, they were evicted and their home was repossessed anyway.

It turns out the sale-and-rent-back company never bothered to pay a penny of the mortgage.

Thank God the Office of Fair Trading has cottoned on to what these schemes are doing. Last month, it joined the Fool in calling for these schemes to be regulated.

I just hope it doesn’t take much longer for the Government to get its act together – while more people like the Martins suffer.

Edited at 2008-11-11 16:28:14

After berating Nationwide for not treating borrowers fairly on this blog last month, I was glad to see the lender cut its Standard Variable Rate (SVR) by 1.5% today.

It is one of only five lenders to have passed on the Base Rate cut in full so far.

The other four are Lloyds TSB, Cheltenham & Gloucester, Bradford & Bingley and Abbey - so hats off to these lenders too.

Nationwide's SVR, however, is by far the lowest at 4.69%. And this from a lender that hasn't taken any money at all from the Government.

Unlike, of course, Northern Rock, Halifax, Bank of Scotland and Royal Bank of Scotland - all of whom are yet to lower their SVRs!

I must admit, this has fully restored my faith in Nationwide as a top class mortgage lender.

As John Maynard Keynes once said: "When the facts change, I change my mind. What do you do?"

So I'd like to say: good form, Nationwide. I just hope other lenders follow your lead!

You can read my fellow Fool Christina Jordan's article for more on the Base Rate cut and how it is affecting mortgage borrowers here
Edited at 2008-11-07 15:52:24

Earlier this week, I had a day off. I decided to spend the morning sorting out, well, everything I’d been putting off for weeks. And in one hour, I saved myself £160.

Here's what I did: I got hold of my bills.

And I read them.

Carefully. Quietly. I took my time. I thought about what each payment was, and why I had made it.

And I spotted a mistake. A £100 payment on my credit card I hadn’t been expecting. When I called up to check what had happened, the company looked through its records and discovered it had mistakenly taken payment twice for this bill.

If I hadn’t checked, I am 100% positive the company would not have discovered its mistake.

Similarly, I noticed that I wasn’t using up all my allocated minutes each month on my mobile phone bill. In fact, I have around 1,500 minutes rolled over from previous months.

So I called up O2 and complained.

To my great surprise, they informed me that I could “pause” my tariff for three months. This means I won’t have a bill to pay for the next three months.

My usual bill is £20 a month, so with that one phonecall, I saved myself £60.

The moral of my story is: READ YOUR BILLS! It really is worth the hassle…


Edited at 2008-11-07 15:24:22

Edited at 2008-11-07 15:26:10 Edited at 2008-11-07 15:43:40

After more than a year of bad news, I thought things were finally starting to look up for mortgage borrowers this month. The Government’s bail-out plan meant banks finally had some money to lend, and confidence looked set to return to the money markets.

But, as I wrote last week, only Halifax, Lloyds, Barclays and Royal Bank of Scotland (among the top 10 biggest lenders) passed on the full 0.5% Base Rate cut to borrowers on their Standard Variable Rates.

This is despite the fact that LIBOR – the rate at which banks lend to each other - has now fallen to its lowest level since before Lehman Brothers collapsed.

Lenders should be passing on these drops in the cost of borrowing to you and me. But they’re not.

In fact, Nationwide today announced it was increasing the rate of its new two-year tracker mortgage deal by 0.59%. It is also limiting most of its range to borrowers with a 15% equity stake – a tall order for many in a falling market.

While this doesn’t affect existing borrower, for new borrowers, this increase effectively wipes out the entire Base Rate cut. And it demonstrates that all the money the Government has used to bail-out the banks and guarantee inter-bank lending will have little effect on ordinary people – unless the lenders start playing passing on the cuts.

So this is a really, really, really bad sign.

Nationwide told mortgage trade magazine Mortgage Solutions that the increase was ‘regrettable’ and blamed the ‘high cost of funding’.

But with LIBOR decreasing daily, this doesn’t cut any ice with me. Especially as the Government has offered Nationwide extra funding whenever it needs it.

So I’d just like to say: Bad form Nationwide. You're poking your borrowers where it hurts... in our wallets!

In the last few weeks, life has been a bit depressing. In fact, it’s got so bad my other half complains every time I watch the news: “Not the credit crunch again!” he moans.

(Sometimes, I even have to put Top Gear on, just to pacify him!)

But is it me, or does everything at the moment seem to be about the credit crunch? For example, yesterday evening I managed to drag myself away from all the drama, only to find myself singing that song from Annie -- “Tomorrow, Tomorrow, I love ya, tomorrow” - very loudly in the bath.

“Annie!” I suddenly thought. “What a great credit crunch movie.”

After all, it’s got some classic credit crunch ingredients: a Great Depression, greedy Americans committing fraud and rich Americans rescuing them.

Plus, if I remember correctly, it ends happily. Now, that’s a nice change from the news.

So it got me thinking, what other top credit crunch movies are out there with happy endings?

1. It’s A Wonderful Life!
Credit Crunchiness: 9/10 – there’s a bank run and a suicide attempt.
Happy Ending Happiness: 10/10 – who needs money anyway? It’s a wonderful life!

2. Bugsy Malone
Credit Crunchiness: 5/10 – it’s the Great Depression and everyone’s out to get everyone else. No banks involved though, sadly.
Happy Ending Happiness: 9/10 –the actors are kids and pies kill you… *giggle*

3. Billy Elliot
Credit Crunchiness: 7/10 – it’s the Miner’s Strike and everyone’s out of a job.
Happy Ending Happiness: 10/10 – Billy gets into ballet school! His friend gets a tutu! Thatcher is no longer in power! Woo-hoo!

4. Mary Poppins
Credit Crunchiness: 8/10 – there’s a bank run, and a banker loses his job. Strange, there’s no hint that the bank will have to be nationalised…
Happy Ending Happiness: 8/10 – Mary Poppins flies off with her umbrella but who cares when you can fly a kite with your dad?

5. The Italian Job
Credit Crunchiness: 5/10 – OK, so it’s not very reflective of the credit crunch, but a film about a bank robbery and lots of nice cars might be just the thing to cheer you up.
Happy Ending Happiness: 5/10 – it ends on a ‘cliff-hanger’ – remember? Still, you’re not human if you don’t enjoy this movie… (I’m referring to the original, by the way.)

That’s my list. What’s yours?




Edited at 2008-10-15 17:45:50

Edited at 2008-10-15 17:46:46 Edited at 2008-10-15 17:47:19

This week, as well as writing, I was off making an On The Money video podcast, with our producer Andy Paul and the assistance of my fellow Fool Szu Ping Chan.

It was lots of fun. We headed off to Paternoster Square by St Paul’s to conduct the vox pops. This basically consisted of me approaching lots of suited City workers with a microphone and asking: Who’s To Blame For The Credit Crunch?

If you want to hear what they said, you can watch the video here.

The sad thing is, only one woman felt confident enough to give her views on camera. And some of the men were really quite sleazy and patronising - so all in all, living up to the City worker stereotype.

For example, in response to my question “have you got a couple of minutes to talk to me?” one guy replied: “No, but you’re very sweet.” Another said: "For you, I could spare many, many minutes... but unfortunately I'm too busy right now."

I'm sure they thought they were being charming but I would just like to take this moment to say: Yuck.

Then it started raining so we got out the trusty Motley Fool umbrella. Only problem is, I’m quite small and the umbrella’s quite big. At one point, it got so windy I almost threw the umbrella (by accident) at someone’s face while I was interviewing him! Needless to say, that clip didn’t make the final cut…

I’ve been writing about the ramifications of the credit crunch ever since it began 14 months ago.

But this month, it really hit home.

First, two good friends of mine made headlines. Or rather, their employers did. He was at Lehman Brothers while she was at Bradford & Bingley. And no, neither of them were traders, making millions. They’re both just ordinary people, doing pretty ordinary jobs. Or they were….

Then my father, who’s in his early 70s, discovered his pension fund was haemorrhaging hundreds of pounds a week. He’d invested a lump sum six years ago into a complex financial product he didn’t understand but had read was safe. Needless to say, not on The Fool.

I felt terrible. At his age, he shouldn’t have any exposure to the stock market whatsoever. I knew this, being Foolish, but I’d never interrogated him about his finances – I’d never wanted to pry and I didn't feel I had the right. Stupid, stupid, stupid.

But at least I could help him now.

His top priority was to put the money somewhere safe, where its value would not be eroded. I cautiously recommended NS&I savings certificates, because they’re tax-free and guaranteed to beat the Retail Prices Index by at least 0.85%, so his investment would always stay ahead of inflation. And, of course, NS&I is backed by the Government, so its certificates are 100% safe.

He was really happy with this, and invested in a three-year certificate last week. Apparently, when the woman at the counter asked him why he had chosen that account, he replied proudly: “Because my daughter’s the deputy editor of The Motley Fool!”

I just hope his faith is not misplaced. And that I’m not cursed. I do have a couple of friends who work for Deutsche Bank. Maybe I better warn them…?



Edited at 2008-10-06 16:19:36

The amount of bad news we’ve had this week is staggering. (If you’ve missed any of it, you can catch up here.)

However, even the mighty black financial cloud hanging over us all has its silver lining.

Here are some of the lighter highlights to emerge from the latest banking crisis:

1. They think it’s called soccer! The American taxpayer is now the main sponsor of Man United, after the US Government bought up 80% of the insurance giant AIG.

2. Ze Germans get it wrong! As the Guardian reported here, “Germany’s dumbest bank” KfW handed over €350m (£275m) to Lehman Brothers two hours before the bank collapsed.

3. Who’s the boss? Rumours are rife about what the new name of the mega-bank of Lloyds TSB/HBOS will be. But as the bank will command a third of the mortgage and savings market, here at the Fool we suggest it should be called ‘LBOS’ – or rather, El Boss. That’s ‘the Boss’ in Spanish for all you uncultured swine out there. We think Alliance & Leicester’s Spanish buyer, Santander, will be particularly happy about this name.

Anyone got any more? Please share with your fellow Fools – we could all do with a laugh this week!
Edited at 2008-09-19 18:11:39

It was 5am and we were fast asleep when the brick smashed through our living room window.

My partner and I woke with a start. I froze. Someone’s breaking in, I thought, over and over. Someone’s breaking in…

“Donna,” my boyfriend whispered. “Did you hear that?”

Mutely, I nodded, still too scared to speak.

“What was it, do you think?”

I swallowed. “It’s a burglar.”

There was a short pause. “Don’t be silly,” he told me.

“It is.”

“It’s not.”

I paused. Could he be right? Was my over-active imagination playing up again? Noting that there had been no more noise, I calmed down slightly:“Go and check, then.”

The moment I uttered the words, I wanted to take them back. But bravely – casually – he got up and walked out of the bedroom. And as I lay there in the dark, I imagined him walking into a room with a hoodie and a knife wearing only his dressing gown…

“They’ve thrown a brick through the window!”

“What?!” I joined him in the doorway and gazed into the living room. Glass was everywhere. The brick – we later discovered – had been thrown with such force into our double-glazed window it had split into three. Shards of grass had ripped the sofa and the curtains and parts of the brick had damaged our floor.

But I didn’t see any of that. All I saw was the gaping hole in the window. Why? Why would someone throw a brick through our window? Who hates us that much?!

“Your laptop’s gone!” My boyfriend exclaimed suddenly, his powers of observation at this point clearly outweighing mine.

Stolen!

Yes, indeed, my laptop was no longer in its usual place – you guessed it – right by the window. They’d simply smashed the window open, reached in and grabbed it.

It’s strange, but what I felt at that moment was relief. I was glad the laptop was gone, because then it made sense. Then there was a reason someone had done such a destructive awful thing to us in the middle of the night.

We called the police immediately and they arrived within 5 minutes. But by then, the burglar was long gone. You can’t get forensics off a brick apparently, and there was no blood on any of the glass. It was, literally, the perfect crime.

The Curse!

As regular readers of my blog will know, this is the second time crime I’ve suffered in the past month! A few weeks ago, my handbag was stolen, right in front of me, while I stood outside a pub.

Am I cursed? To misquote Oscar Wilde, “to become a victim of one crime may be regarded as misfortune – to become a victim of two looks like carelessness”.

Certainly, I blame myself for both crimes. If only I hadn’t put my bag on the ground, if only I hadn’t left my laptop near the window….

But then, I can thank my lucky stars I took Foolish precautions – if not practical, crime-related ones! For example, I backed up my data a month ago. And I do have insurance, so it should all be covered.

It’s the hassle more than anything that gets me down. And the feeling of being vulnerable.

On the positive side, the laptop was a good few years old… and I have recently discovered my card protection insurance allows me to spend up to £200 on a new handbag!

As Monty Python would say: “Always look on the bright side of life… de doo… de doo de doo de dooooo….” :-)]

Edited at 2008-09-17 12:56:07 Edited at 2008-09-17 12:59:24

My project this week at the Fool has been to oversee our first ever ‘Student Special’.

This will be arriving in Fools’ inboxes tomorrow (Saturday) but you can get a sneak peak at the content here.

Hopefully it will help students to manage their finances better while at university – and save them a bit of cash as well.

I left university five years ago and have been working as a journalist pretty much from the moment I graduated. Despite making contributions every single month to pay off my student loan, my last statement from The Student Loans Company showed I owe them exactly the same amount as I did when I graduated.

And I’m one of the lucky ones. I have paid off my student overdraft and I don’t have any credit card debt. I was always pretty responsible with my finances and bills, so my credit record from that period is pretty clean.

Many of my friends are not so lucky. They have credit card debts they ran up at university that are now eight years old, and still growing every day. They have paid out thousands of pounds in interest and bank charges. They have black marks on their credit records because they forgot to cancel a bill or went over their authorised overdraft limit late one night because they wanted some chips from the ‘Van of Death’….

This guide will hopefully ensure that, no matter how many hangovers you get while at university, your debt hangover is as painless as possible.

Good luck!

Check out The Student Special Guide now!