Crosby report on mortgage market

I dont normally like to cut and paste story's but this is a biggie

LONDON (Reuters) - An interim report by former HBOS chief executive Sir James Crosby on ways to revive Britain's mortgage markets will be published on Tuesday, the Treasury said on Monday.

The report was commissioned by the government in April as it became clear that a lack of mortgage finance was driving down house prices with worrying speed.

"Crosby will publish his interim report analysing the functioning of the secondary mortgage market on Tuesday, with his final recommendations to the Chancellor due in time for the Pre-Budget Report," said a Treasury spokesman.

The spokesman declined to comment on newspaper reports suggesting the government will back an ambitious scheme allowing banks to swap new mortgage debt for government securities.

A Special Liquidity Scheme unveiled by the Bank of England in April allowed banks to swap hard-to-shift mortgage assets for government securities only if the mortgage loans were on their balance sheets at the end of 2007.

The central bank's scheme did succeed for a while in shoring up confidence in the sector, but banking experts say more needs to be done.

The securitisation markets, where up to 40 percent of mortgages were funded last year, remains shut and the impact of the mortgage market strains on the housing market is becoming more apparent by the day.

Figures from the British Bankers' Association show the number of mortgages approved for house purchase slumped by more than two thirds in June from a year ago to hit a fresh record low.

Tuesday's interim report from Crosby's team is not expected to contain concrete proposals. Those will be left for the final report this autumn.

Rob Thomas, senior policy adviser at the Council of Mortgage Lenders, urged the government not to delay any plans that might help.

"The Treasury has given us no indication of their plans but time is of the essence. There is no logic in waiting," he said.

Pounds to Euros currently 1.2700



Pounds to US Dollars currently 1.9789