Wednesday 16th July 2008

Dear Intermediary

The global and UK financial markets continue to be volatile with further reductions in house prices in recent months as well as increases in unemployment, inflation and pressure on interest rates. There is also much speculation as to what the immediate future holds.
 
As an established and committed balance sheet lender in the specialist mortgage market we review key economic data to ensure that our current product proposition and scorecard allow us to attract customers, whilst managing market risk. 
 
In consideration of the above we will be making the following changes on Friday 18 July 2008, to our new 2908 range:

• Full status and Self Cert loan to values (LTVs) reduced across the range.
  • New maximum LTVs are as follows:
    • FTB+  - employed 90%, Self-cert 75%
    • FTB - employed 80%, Self-cert 75%
    • NP+ - employed 90%, Self-cert 85%
    • NP - employed 90%, Self-cert 80%
    • UL - employed 85%, Self-cert 80%
    • Light - employed 85%, Self-cert 75%
    • Light to Medium-employed 80%, Self-cert 75%
    • Medium- employed 75%, Self-cert 75%
      
• Changes to maximum LTVs for Right to Buy
  • FTB - purchase 80%
  • Medium - purchase or refinance is 75%
    
• New build and new conversion flats will be limited to a maximum LTV of 80% (new build flats are defined as being up to and including properties that are 5 years old)
  
• High adverse product is no longer available on the First National Range
  
• NP+ defaults now 0 in last 24 months
  
• Completion fee now £1,695
  
• Owing to the current cost of funds, rates have been reviewed across the range

Pipeline Arrangements
 
Strict rules for managing pipeline business will apply.  Applications that do not meet these strict timelines cannot be processed on existing plans and will have to be written on the new 2908 range.

No exceptions will be made to this rule 

DIP deadline for new applications

You will need to produce a DIP (irrespective of LTV) on the current 2608 range by close of business on 17 July.

Please note that after close of business on 17 July 2008 you will be unable to amend DIPs created on the 2608 range.  Provided there has been no change to any applicant’s full name, address or date of birth (as reflected within the KYC documentation), the application meets our criteria and is received before the submission deadline the original DIP decision will be honoured. If any of these details have changed, the new scorecard, criteria and rates will apply.

Packaged Application deadline

We need fully packaged cases for the 2608 range in our offices by close of business on Thursday 31 July 2008. To speed up processing of your cases you must ensure your packs meet the minimum submission standards. Packs not meeting minimum standards will be returned to you, this will apply to any existing unworked packs.
 
Minimum pack requirements are:

Offered cases on plans up to and including 2608 will need to complete strictly within the  3 month period of the offer and by no later than 22 November 2008.  If an application fails to complete within 3 months of the original offer date, the rates and criteria available at this time will be applied. 

No exceptions will be made to this rule 

Other Documentation

An updated Underwriting and Packaging guide will be available on FNOL from Friday 18 July 2008.

We remain committed to the specialist mortgage market in the UK and the changes that we are making clearly demonstrate our strategy to take decisive and prudent actions in the light of market changes, so that we maintain a sustainable long-term proposition to support both your and our interests.

If you have any questions please do not hesitate to contact your National Account Manager,

Business Development Manager or the Sales Liaison Team on 0845 610 6560.

Kind regards

-

Mark Snape

Sales Director Packager Channel

PLEASE NOTE THAT THE ATTACHED IS FOR INTERMEDIARY USE ONLY AND SHOULD NOT BE DISPLAYED WHERE CUSTOMERS MAY VIEW IT NOR SHOULD IT BE SHOWN TO CUSTOMERS.

For intermediary use only.
This promotion is intended to provide information on First National products for mortgage professionals only and is not intended as a promotion to prospective First National customers. Prospective customers interested in First National products should first seek professional mortgage advice from an authorised intermediary before applying for a First National mortgage.

First National is a trading style of GE Money Home Lending Limited. Registered office Building 4, Hatters Lane, Croxley Green Business Park, Watford, Hertfordshire, WD18 8YF. Registered in England no 3770763. GE Money Home Lending Limited is authorised and regulated by the Financial Services Authority.

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