The document summarizes: 1) Nicolette Ward discusses creative reasons people give for not paying their mortgages, such as the "Freeman on the Land" movement which claims people can opt out of debt obligations. 2) HML forecasts that UK repossessions will decline to 20,606 in 2015, with the highest number in Greater London. 3) A third of interest-only mortgage customers contacted by two lenders immediately took up an offer of free mortgage advice.

1. February 2015
Nicolette Ward, from SGH Martineau, on the creative reasons
people come up with as to why they cannot pay their
mortgage
Fitch comments on the purchase of UK mortgage servicers
HSBC has reported a 17% decline in profits

2. HML News
Partner guest blog: Nicolette
Ward, SGH Martineau -
Creativity during distressed
periods: the Freeman on the
Land Movement
Nicolette Ward, Client Relationship
Manager for Mortgage Repossession and
Sales at SGH Martineau, explains that
during difficult financial periods, people
can get creative with their reasons as to
why they cannot pay their debts.
Having provided lender recovery services for
20 years, it is often apparent that when
borrowers find themselves in difficult financial
circumstances, they become particularly
creative with arguments as to why they should
not have to pay their debts.
One such example is a movement known as
“Freeman on the Land”, or simply Freemen.
This movement appears to have gained
traction in mid 2008 (coinciding with the
crash), albeit examples of this type of anti-
capitalist rhetoric have been doing the rounds
in the United States since the 1970s.
Unfortunately, what once would have
remained local, thanks to the internet has now
garnered a following in Canada, Ireland and
the UK. The ideology is simple enough. The
Freemen believe they can opt out of being
governed and what you and I understand to be
the “laws” are merely a form of “contract” that
applies only if people consent to it. In practical
terms, this means they do not have to pay
taxes, debts or mortgages.
You would think that a sensible individual,
having read the terms and conditions of a
contract before signing it, would not be fooled
into spouting nonsensical legal concepts, but
you would be wrong.
“Lawful rebellion” in British Freeman theory
holds that one can lawfully choose to cease
abiding by the laws, rule and statutes of a
country by simply opting out of society and
Freemen happily claim that clause 61 of the
Magna Carta allows them to opt out.
There are a number of websites from which
followers can source standard wording which
appears almost verbatim in the variety of
documents that are lodged at court during the
course of a possession claim and initially
exercised Judges who had not seen the like
before: “I, Nicolette: of the Ward family,
hereinafter known as a flesh and blood human
being, a living soul, do hereby make Oath and
state, it is my understanding that a living
breathing imaginative human being who
chooses by free will not to be a member of
society can be referred to as a Freeman of the
Land.”
Continued over the page

3. HML News
Freemen also believe in dual personality - the
physical human being and a legal persona.
The legal person or “strawman” is a legal
fiction created by a birth certificate, but like
sailors lost at sea who are declared dead after
seven years, every citizen is also legally dead
seven years after their birth. This is utter
nonsense and the good news is that no
Freemen arguments (and there are many
more) have ever succeeded in court. Most
Judges robustly state that the arguments have
no legal significance whatsoever.
Cause for concern
However, there is cause for concern. Often a
Defendant will not admit that he or she is the
person against whom a claim has been
issued, won‟t give their correct name at a
hearing or will state they are there 'on behalf'
of the borrower.
They return documents stating 'not known at
this address' and as they become more
entrenched in their beliefs, it can become
harder for lenders to ever speak to them
because they will not answer security
questions, as they are not the borrower.
This movement even sparked civil unrest. On
one occasion in the County Court of
Birkenhead, around 600 Freemen attended
and tried to arrest the District Judge. Albeit,
this tale still raises smirks, the sad truth is that
this movement gets people into more financial
difficulty, not less, including fines, contempt
convictions and possibly prison and unlike
Jack, who foolishly sells the family cow for a
handful of beans to save the family from
penury, the fairytale ending never comes for
the Freemen of the Land.
Disclaimer: The views expressed in this blog
are Nicolette Ward’s and do not necessarily
reflect those of HML.
Regional repossessions
expected to decline; but
Greater London is forecast to
experience the highest
number in 2015.
In 2015, 20,606 residential properties are
expected to be repossessed, according to
HML‟s latest regional repossession forecast.
According to HML, Greater London will
experience the highest number of
repossessions in 2015 at 2,641.
In second place is the South East, with 2,605
repossessions forecast. The region expected to
see the fewest number of repossessions this
year is the East Midlands at 1,027.
In terms of repossession rate (which reflects the
proportion of properties in the region), Northern
Ireland is forecast to have the highest at 0.49%.
Wales is in second place at 0.26% and Greater
London is in third place at 0.25%.
HML is the only organisation to provide a
regional repossession forecast for the UK that
includes Northern Ireland and Scotland.
You can see the regional repossessions
statistics over the page.

4. HML News
Region Repossession Rate Forecast UK Forecast
East of England 0.17% 1,742
East Midlands 0.13% 1,027
Greater London 0.25% 2,641
North 0.23% 1,045
North West 0.17% 2,153
Northern Ireland 0.49% 1,571
Scotland 0.16% 1,729
South East 0.17% 2,605
South West 0.14% 1,222
Wales 0.26% 1,354
West Midlands 0.23% 2,082
Yorkshire & Humber 0.16% 1,435
Total 0.20% 20,606
Damian Riley, director of business
intelligence at HML, said: “After what
has been a difficult few years for many
households in the UK, it looks as though the
clouds are parting and there is calm after
the storm.
“HML expects repossessions to stand at
20,606 in 2015, representing a
repossession rate of 0.20%. A combination
of lower unemployment, declining inflation
and an increase in economic sentiment will
no doubt have contributed to our expected
decline in repossessions.
“On the other hand, lenders are working
hard to help customers stay in their home
when experiencing financial difficulties. A
combination of increased forbearance,
improving macro-economics and Britons
having a better handle of their personal
finances is likely to have contributed to this
expected decline in repossessions.”
“After what has been a
difficult few years for
many households in the
UK, it looks as though
the clouds are parting
and there is calm after
the storm,” Damian
Riley, director of
business intelligence at
HML.

5. HML News
A third of interest-only
customers immediately take
up free mortgage advice.
It has perhaps gone a little bit quiet on the
interest-only mortgages front. During 2013,
interest-only mortgages were a hot topic – and
at HML, we certainly haven‟t taken our foot off
the pedal when it comes to customer contact
campaigns.
Contacting interest-only customers to make
them aware of the need to fully repay their
loan upon maturity is an important starting
point, but lenders should offer as many
repayment options as possible – and, ideally,
offer free mortgage advice.
The FCA‟s interest-only review identified that
approximately 600,000 interest-only borrowers
will see their mortgage mature before 2020, so
it is imperative that lenders ramp up their
contact and support efforts – and providing
free advice is one sensible option.
Two lenders, similar findings
HML deployed a free mortgage advice
strategy on behalf of two of our clients – and
the results were similar. In both cases, of
those interest-only customers contacted to ask
if they would like to take advantage of free
mortgage advice, around a third for both
lenders were prepared to be passed over to a
mortgage adviser there and then. Customers
were then provided with whole-of-market
options.
Interestingly, we carried out these particular
campaigns for our clients before the Mortgage
Market Review (MMR) came in. The demand
for free mortgage advice was there prior to the
regulation and, it could be said, backs up why
the MMR is an important introduction to the
mortgage market.
If lenders are prepared to offer free advice
to their interest-only mortgage customers,
this will result in appropriate outcomes for
both parties. For customers, receiving
mortgage advice can help ensure the
product they are on is the most suitable
for their needs. Offering to put them
immediately in contact with an adviser
means one less thing for a customer to do
and could result in them taking action to
improve their financial situation – such as
converting to part-and-part or full
repayment. In some cases, it may be an
acknowledgement that the customer
cannot afford to repay the outstanding
balance and therefore needs to take steps
towards selling the property at the
appropriate time.
For lenders, having interest-only
customers move to a more affordable
product or increase their repayments so
they will clear their mortgage at end of
term improves the credit risk profile of
their portfolio.
The message is clear; interest-only
customers are willing to accept free
mortgage advice. The question is, will
other lenders step up and provide this
service?
This blog is by Chris Mills, HML’s chief
commercial officer, exclusively for
Mortgage Solutions.

6. Industry Statistics
*Date reflects what the statistic was during that period, rather than
when the statistic was published
JAN ‟15 DEC ‟14 NOV ‟14
Consumer Prices Index
0.3%
0.5% 1.0%
FEB ‟15 JAN ‟15 DEC ‟14
BoE Base Rate 0.5% 0.5% 0.5%
OCT-DEC „14 SEP-NOV „14 AUG-OCT „14
Unemployment Rate (ONS) 5.7% 5.8% 6.0%
JAN „15 DEC „14 NOV „14
Halifax House Price Index Up 2% on DEC Up 0.9% on NOV Up 0.4% on OCT
Average price Average price Average price
£193,130 £188,858 £186,941
Gross Mortgage Lending (CML) JAN „15 DEC „14 NOV „14
Down 14% on DEC Unchanged on NOV Down 9% on OCT
£14.3 billion £16.5 billion £16.9 billion
Home Repossessions (CML) 2014 JULY-SEP ‟14 APR-JUNE ‟14
21,000 5,000 5,400

7. Industry Statistics
Consumer Prices Index
The CPI decreased by 0.2% on December to
0.3% in January. A continuing decline in motor
fuels prices was a main contributor to the
slowdown of the inflation rate.
BoE Base Rate
The Bank of England kept the base rate at
0.5%, as well as the stock of asset purchases
at £375 billion.
The Monetary Policy Committee once again
voted unanimously to keep the base rate at
0.5%. In previous months, Martin Weale and
Ian McCafferty split the MPC 7-2 and wanted
to increase the base rate by 25 basis points.
Halifax House Price Index
The average price of a home increased by 2%
between December and January to £193,130.
Values in January were 8.5% higher than the
same month in 2014.
Housing economist at Halifax Martin
Ellis said: “This bounceback in house price
growth in January coincides with reports of the
first rise in mortgage approvals for six months
in December. These improvements may
indicate that the recent declines in mortgage
rates, the reform of stamp duty and the first
increases in real earnings for several years
are providing a modest boost to the market. It
is, however, too early to draw any firm
conclusions.
“Housing demand should continue to be
supported by an expanding economy,
continuing low mortgage rates and a boost to
households‟ spending power resulting from
lower consumer price inflation and reduced
fuel bills. Nonetheless, we expect the overall
downward trend in house price growth seen
since last summer to continue over the coming
months.”
Unemployment Rate
The unemployment rate for October to
December stood at 5.7%, representing 1.86
million people.
There were 30.90 million people in work, an
increase of 608,000 compared to a year earlier.
Gross Mortgage Lending
Gross mortgage lending stood at £14.3 billion in
January, 14% down on December and 11%
lower compared to January 2014.
CML chief economist Bob Pannell
said: “The softer pace of approvals through the
second half of last year contributed to the
relatively weak pace of mortgage lending in
January. Although seasonal factors will
continue to weigh on activity levels for a while
longer, we expect the underlying picture to pick
up over the coming months, in line with stronger
earnings and employment, gentle interest rate
trends and recent stamp duty changes.”
Home Repossessions
Repossessions declined to 21,000 in 2014,
down 26,000 on 2013 and the lowest number
since 2006, the CML revealed.
Paul Smee, director-general of the
CML, said: “The relatively low rate of
repossession among owner-occupiers - around
1 in 600 mortgages last year - should help to
reassure borrowers that, if they do face
payment difficulties, lenders will work with them
to try to resolve their problems. Repossession is
only ever a last resort.”

8. Top News Stories
.Fitch has commented on the
purchase of UK mortgage
servicers.
The rating agency noted that sometimes,
uncertainties can arise as a result of third-party
mortgage administrators being purchased. For
example, this can include operations, post-
acquisition strategy and the potential impact on
performance and stability.
Fitch upgraded HML's Special Servicer Rating
just one month after we were acquired by
Computershare. The rating agency explained
the reasoning behind its decision.
Computershare owns a US mortgage servicer,
Specialised Loan Servicing (SLS). Since it was
purchased by Computershare in 2011, SLS has
expanded its servicing portfolio and improved
technology and control systems.
Fitch believes that similarly, Computershare will
provide HML with infrastructure and operational
support.
The rating agency said: “All servicers
may find increasing their third-party business
challenging. The UK is Europe's most
competitive market and Homeloan Management
Limited (the UK's largest third-party residential
mortgage servicer by AUM) and Pepper (UK)
(formerly Oakwood Global Finance) have
consolidated their dominant positions. It is not
clear that anticipated growth from new lenders,
outsourcing, and non-conforming lending will
materialise. Recent entrants to the lending
market have kept servicing in house and
concerns about the operational risks of servicer
transfer have led to few securitised portfolios
changing hands. If opportunities do not
materialise, the financial and operational
support new owners provide could reduce. This
could be negative for servicer ratings.”
Tesco is set to offer
mortgages through
intermediaries next year.
Speaking to the Daily Telegraph,
Tesco Bank chief executive Benny
Higgins said: “We‟ve been [in the direct
market] for over two years now, and we realised
that while we‟re happy with how it‟s going, we
are only serving a modest proportion of Tesco
customers.”
He added that offering home loans through
intermediaries will enable the company to
“considerably” expand its mortgage arm.
Tesco Bank is currently developing the
infrastructure required to sell through
intermediaries. The first half of 2016 has been
earmarked for the launch.
Mr Higgins added: “Whilst it wasn‟t our intention
at the very outset, it is clear to us that over half
of Tesco customers are buying mortgages
through brokers and that number is increasing
under the new regulatory code.”
Greece has been granted a
four-month eurozone deal
extension.
The country had asked for a six-month
extension, but had agreed the deal and to
provide an initial reform measure list by
February 23rd.
Greece also pledged that it will honour all of its
debts.

9. Top News Stories
HSBC has reported a 17%
fall in profits.
The bank revealed in its 2014 financial results
that profit before tax has declined 17% on 2013
to $18.7 billion (£12.1 billion).
UK customer redress, settlements and fines
played a part in the fall in profit.
HSBC‟s group chief executive Stuart
Gulliver commented: “2014 was a
challenging year in which we continued to work
hard to improve business performance while
managing the impact of a higher operating cost
base. Profits disappointed, although a tough
fourth quarter masked some of the progress
made over the preceding three quarters.
“Many of the challenging aspects of the fourth
quarter results were common to the industry as
a whole. In spite of this, there were a number of
encouraging signs, particularly in Commercial
Banking, Payments and Cash Management and
renminbi products and services. We were also
able to continue to grow the dividend.”
HSBC has been in the news recently for the
Swiss accounts held by some of its customers.
A former employee at the bank leaked
information that showed how HSBC helped
some clients avoid paying taxes between 2005
and 2007.
HSBC has also confirmed that Mr Gulliver has a
Swiss account, following a report by the
Guardian that he holds £5 million in it.
Legal representatives for the chief executive
explained that as a Hong Kong resident, Mr
Gulliver pays tax there and has “for a number of
years” voluntarily declared his Swiss accounts
to the tax authorities in the UK.”
Standard Life continues its
transformation into an asset
management company.
In its full-year results, Standard Life unveiled
group operating profit before tax of £604 million,
a 16% increase on 2013.
Group assets under administration climbed from
£214.7 billion in 2013 to £296.6 billion in 2014,
in part boosted by Standard Life‟s push into the
asset management arena.
Its acquisition of Ignis Asset Management
added £60.5 billion of assets to its operations. It
purchased the firm from Phoenix Group
Holdings for £390 million.
David Nish, chief executive of
Standard Life, commented: “We have
made good strategic progress during the year
with the acquisition of Ignis Asset Management
and the sale of our Canadian operations,
increasing focus on fee business and enabling
a £1.75 billion return to shareholders. We are
also well positioned to deal with the far-reaching
reforms to the savings and retirement income
rules in the UK and to support customers
through these changes. Standard Life
Investments has continued to perform strongly
and expand internationally.
"Although investment markets are unsettled and
may affect the near-term pace of asset and
revenue growth, we are very well placed for the
future. We have an excellent track record of
succeeding in evolving markets and have the
products, experience and proven investment
performance to help our customers and clients
in all of our markets to save and invest, so that
they can look forward to their financial futures
with confidence.”