Remortgages: Defending a Man’s Castle?

In the present state of the economy, and considering the fragile and tentative recovery that many believe that we are experiencing, the property market is continuing to be frequently used as a barometer of the effects of the recession. While the latest statistics would argue that the United Kingdom is still within the recession and experiencing the effects with more severity than ever, property market experts are reluctant to write off the recent upturn in mortgage lending.

Donna Green examines the divide between the mortgage and remortgage market, considering the impact of the latest news that the sectors of mortgage lending and equity release are on the long road to economic recovery.

The latest news that the division between the mortgage and remortgage lending rates has widened throughout 2009 demonstrates that while some sectors are experiencing a resurgence in economy, others continue to experience the full effects of the downturn. The Director General of Self Home Income Plans, Andrea Rozario, has given an analysis of the equity release market within the property industry, however acknowledged the nature of division evident in recovery.

“While equity release providers are experiencing high levels of customer demand, a significant impact on the quarter's business figures has been the lack of liquidity in the overall market.”

Furthermore, the stagnant characteristics that the markets are currently offering details a difficult set of circumstances under which to make specific financial decisions regarding properties. As previously reported, the record low interest rates set by the Bank of England are allowing many mortgage providers to offer competitive rates on mortgage loans, in many cases eliminating any demand for refinancing or remortgage loans.

In much the same way, the equity release market has suffered with plummeting demand throughout the recession, however can be seen to be tentatively beginning to recover. The statistics released by Self Home Income Plans document a mid-year growth from the statistics available from the start of the year and since the third quarter of 2008, the amount of equity released from properties has risen, further attesting to the assertions within the property market of an economic upturn.

With the recent news on proposed pension reforms, retirement ages and legal action taken against unprofessional pension providers, these figures come as welcome news to those seeking to draw income from the value of their properties. In comparison with the remortgage market, the equity release market can be argued to have fared better throughout the economic turmoil by virtue of the fact that it is not as heavily reliant upon the economy. Whilst equity release is obviously directly linked to house prices, unlike the remortgage market, it is not wholly underpinned by Bank of England interest rates.

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Purchase loans up by 77% but remortgages plunge

The number of remortgage approvals plummeted by 60 per cent to 21,282 last month from 52,717 in September 2008, according to figures from the British Bankers’ Association.

House purchase approvals rose by 77 per cent over the same period from 23,808 to 42,088, with £5.9bn of house purchase loans approved in September compared to £3.2bn in the same month last year.Legal & General director of mortgages Ben Thompson says: “The remortgage market is as dead as a dodo, according to the figures from the BBA, and let’s face it, this situation is not going to change much for a long time to come. As long as the bank rate stays this low - and why shouldn’t it given today’s GDP figures? - then there is little incentive for borrowers to shift from their standard variable rate.”

BBA statistics director David Dooks says: “Mortgage lending by the high-street banks is continuing to improve from the lows seen earlier this year and the number of house purchase approvals continues to recover.

“Housing market activity will depend, however, on more properties coming on to the market.”


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Five of the best mortgage deals

Borrowers will need a deposit or equity of 40 per cent of the value of the property, although the bank offers a similar loan charging 2.49 per cent to those who have a 25 per cent deposit. There is a fee of £1,199 in either case.
One caveat is that the interest rate is linked to HSBC's standard variable rate (SVR), which it can change at will, rather than the Bank of England's official rate. At the end of the two-year introductory offer, under which the rate you pay is 1.95 percentage points below the SVR (currently 3.94 per cent), the rate will revert to the standard variable rate itself.
David Hollingworth of London & Country Mortgages, a broker, said: "This deal offers an extremely eye-catching rate and there really is no direct competition."
TWO-YEAR FIX FROM FIRST DIRECT, INITIAL RATE 3.49 PER CENT
If you would rather not have to worry about interest rates changing and want to be sure that your monthly repayments are fixed for a set number of years, there are a number of competitive fixed-rate mortgages on the market.
The lowest two-year fixed rate is from First Direct, according to Mr Hollingworth. The rate is 3.49 per cent, but borrowers will need to be careful to factor in the large fee, £1,298, to make sure that it represents the best deal for them. The rule of thumb is that the bigger the loan, the less significant the fee.
This mortgage is also for amounts of up to 60 per cent of the property value. For people wanting to borrow 75 per cent, the lender will charge interest at 3.94 per cent - "this also represents good value", Mr Hollingworth said.
Alternatively, moneyfacts.co.uk, the information service, recommends NatWest's two-year fix for 75 per cent loans at 3.69 per cent with a fee of £799.
FIVE-YEAR FIX FROM NEWCASTLE BUILDING SOCIETY, INITIAL RATE 4.99 PER CENT
Some borrowers are reluctant to fix for just two years, on the basis that many economists expect Bank Rate to remain very low for some or all of that period, making a variable rate such as HSBC's more attractive. After all, why fix at 3.49 per cent for two years if you think you will pay 1.99 per cent for two years with a tracker?
But as few expect rates to remain so low for five years, a longer-term fixed rate could make more sense.
Newcastle's five-year fix charges a rate that ranks alongside the lowest available over that period but is also offered for up to 75 per cent of the property value, where others, such as a 4.95 per cent deal from HSBC, are available only at 60 per cent. Mr Hollingworth said: "This is a great deal for those looking for medium-term security." The fee is £994.
THREE-YEAR TRACKER FROM ABBEY, INITIAL RATE 2.99 PER CENT
Another mortgage that illustrates the fact that borrowers will, initially at least, pay less with trackers than with fixes.
This loan charges 2.49 percentage points above Bank Rate for three years, meaning that you would currently pay 2.99 per cent. At the end of the introductory offer the rate reverts to Abbey's SVR, currently 4.24 per cent.
Borrowers need a deposit of at least 30 per cent and there is a fee of £995, although Abbey will pay for the valuation and legal work.
OFFSET LIFETIME TRACKER FROM WOOLWICH, INITIAL RATE 2.97 PER CENT
Some borrowers would prefer a loan that they can stick with for the whole term, avoiding the need to remortgage every few years.
This mortgage tracks Bank Rate for the entire term, charging 2.47 percentage points above the Bank of England rate. Borrowers need a 30 per cent deposit and will pay a fee of £1,499; there is also an early repayment charge for the first three years.
As this is an offset loan, borrowers can use their savings to help reduce the interest bill.


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Northern Rock introduces flexible mortgage range for residential purchase customers

Northern Rock has launched a range of mortgages for residential purchase, a 2-year Flexible Fixed Rate from 3.99% up to 65% LTV, a 5-year Flexible Fixed Rate from 5.69% up to 65% LTV, and a 2-year purchase Flexible Tracker Rates from 2.99% up to 65% LTV.

The new two-year Flexible Tracker mortgage is available to residential purchase customers for 2.99% (BOE + 2.49%) with a £995 Product Fee, or with no Product Fee for 3.79% (BOE + 3.29%), Both options are offered to a maximum of 65% LTV.

Two-Year Flexible Fixed Rate mortgages for purchase customers are now available from just 3.99% with a £995 Product Fee or from 4.89% for customers who choose a Fee Saver Option.

A two-year Flexible Fixed Rate is available at 5.19% at 75% LTV with no Product Fee, or the lower rate of 4.55% with a Product Fee of £995.

Five-year Flexible Fixed Rates are also on offer to residential purchase customers starting from 5.69% with a £995 product fee, or from 6.19% with no Product Fee for loans up to 65% LTV

Remortgage products are also available with the added incentives of free basic valuations and free standard legal fees.


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How to avoid remortgaging pitfalls

The offer of a new remortgage deal with a lower interest rate may be tempting – but there are a number of pitfalls to be wary of to make sure you get a good deal.


Early repayment charges (ERCs)

Early repayment or redemption charges (ERCs) are used by lenders to keep homeowners with them over the course of a set period.

For short-term fixed-rate mortgages, ERCs usually stand for the length of the initial deal – and are dropped when the mortgage switches to the lender's standard variable rate.

Before remortgaging it is worth checking the small print of your current deal to see when the ERCs stop applying – so you are not hit by a lender's higher standard variable rate (SVR) for too long or the ERCs themselves by switching too early.

On longer-term mortgages – of five, ten or 25 years – the ERCs tend to reduce over the length of the deal.

Those planning debt consolidation loans should also put ERCs into their calculations – if remortgaging to bring together all their debts.

Remortgaging costing more than saving

It is easy to be seduced by the lower rates on a remortgage deal – but it is necessary to factor in all the costs of switching lenders. Sometimes the extra costs can outweigh any potential gains.

Beyond ERCs (above) remortgagers also face legal fees and valuation fees. Usually the new lender will pay these costs – but not all lenders do and not in all situations.

New lender's fees

Fees when you start a mortgage are increasingly common and something to add to calculations when considering whether it makes sense to remortgage or not.

Setting up a new mortgage can leave you facing arrangement fees and reservation fees. Remortgage deals exist without the fees – but often the interest rates are higher.

Other costs include valuation fees – as the mortgage lender assesses the value of the property they are lending against - and legal fees. However many lenders do offer to cover these costs.

Higher lending charges could also be payable if you are borrowing over 90 per cent of the value of the property.

Those opting for a remortgage deal through a broker could face paying their fees – depending on whether the broker charges a fee or receives commission from a lender.


Daily or annual interest

A detail often missed when choosing a new mortgage deal is whether interest is calculated daily or annually.

It may seem like there is little difference between daily and annual interest – but with interest calculated annually it is only after a year of repayments that you benefit from a cut in repayments.

When a mortgage's interest is calculated daily as you repay, the amount owed is reduced and so are the repayments.


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Goodbye to the 0pc mortgage

Thousands of home owners who are currently enjoying rock-bottom mortgage rates will soon see these ultra-cheap deals come to an end.
Borrowers lucky enough to have snapped up tracker deals with Halifax, Cheltenham & Gloucester (C&G) and Birmingham Midshires two years ago have been paying zero interest on their mortgage for the past six months.And many more home owners have been enjoying rates of less than 1pc – with Abbey, Alliance & Leicester, Intelligent Finance and Saffron Building Society all previously selling tracker deals that offered substantial discounts off the Bank Rate – which has stood at just 0.5pc since March.
But in the next few months tracker deals will all expire, causing a sharp increase in monthly mortgage payments for many families.
For example, those on a popular Halifax tracker – which charged a rate equivalent to 0.51 percentage points below the Bank Rate – have been paying just £544 a month since March, assuming they had a £150,000 mortgage. These families will now have to find an additional £250 a month when they are moved back onto Halifax's standard variable rate (SVR) which currently stands at 3.5pc. On a £150,000 mortgage this will mean mortgage repayments of £792 a month.
Melanie Bien, a director of independent mortgage broker Savills Private Finance said: "Many mortgage holders face a payment shock in the coming weeks and months, as they come to end of the super-cheap tracker rate."
Richard Morea of mortgage brokers London & Country added: "Many home owners have been paying next to no interest on their mortgage. But these deals will end very shortly. These borrowers need to look closely at their circumstances to decide whether they want to remortgage now or not."
But Mr Morea points out that not all of these deals will automatically revert to the bank's SVR. Many of these mortgages offered "lifetime tracker" options, which still look competitive today.
For example, those coming to the end of one of Alliance & Leicester two-year tracker deals will pay just 0.99 percentage points above the Bank Rate for the life of the mortgage – giving a pay rate today of just 1.49pc. This is significantly below A&L's SVR of 4.99pc and likely to be more competitive than any mortgage deal available on the high street.
Intelligent Finance, Saffron Building Society and other A&L tracker mortgages all offer similar options.
And remember, borrowers are automatically moved onto this rate. There is no arrangement fees or legal costs to pay, and there will be no penalties for switching at a later date.
In contrast most trackers offered by Halifax, Abbey and C&G move customers straight onto that bank's SVR.
Mr Morea adds: "It is imperative the home owners find out from their lenders what rate they will pay when their current deal ends, before they look at remortgaging." Given the generosity of many of these deals, lenders are probably not going out of their way to highlight what a good rate you'll have. So make sure you ask the right questions – and don't assume you will be automatically move onto the SVR.
Those that don't have the option of a "go to" rate should check what SVR will be charged.
At one end of the scale is C&G and Nationwide building society – both charging a competitive 2.5pc. Those moving to this rate are still going to see an increase in their monthly mortgage payments – but they are unlikely to find another mortgage deal significantly cheaper, in the short term at least.
However Abbey is charging 4.24pc while both Woolwich and A&L charge 4.99pc. But these look cheap when compared to the SVRs charged by many smaller building societies. According to Moneyfacts, the financial information group, at least 20 charge more than 5pc, with the most expensive being Stroud & Swindon, Newcastle and Nottingham BS – all of whom have SVRs of 5.99pc.
Ms Bien added: "What you do next will depend on your lender. If it offers one of the cheaper SVRs you may be tempted to sit tight and rate until rates go up before remortgaging, as it is unlikely they will be able to significantly undercut this rate. In addition there will be no fees to pay, borrowers are not tied into any deal, and the amount of equity you have in your home is not an issue."
Ray Boulger, of John Charcol agreed. He said: "If makes sense for these borrowers to stay put rather than pay fees and get locked into mortgage deals. But for those on higher SVRs now could be a good time to pick up a good discounted deal."
Mr Morea points out that home owners should think about more than just the rate offered. They need to look at their own financial circumstances. "Those who know that they would struggle to repay their mortgage if interest rates increase significantly may want to consider a fixed rate, even if that means paying slightly more for this peace of mind in the short term."
No one has a crystal ball, but it is clear that interest rates can only go one way: upwards – although economists remain divided as to when rates will start to edge up, and how far they will go. But given many fixed rates are more than 5pc, many home owners are unwilling to pay significantly higher interest rates now on a hunch that rates will soon spiral.
Home owners also need to consider how much equity they have in their home. Those with less than 25 per cent will have a lot less choice, and the keenest rates are still primarily reserved for those with looking to borrow just 60pc or less of their property's value.
So what deals are available? Most borrowers agree that, in terms of rate, home owners can't beat HSBC's two-year discount deal, with a current pay rate of 1.99pc. Borrowers pay 1.95 percentage points below HSBC's main SVR. But this is only available to those on a 60pc loan-to-value, and it comes with a £1,199 fee. (Those with less equity can still get this deal, but the discount is narrower).
Other options include Woolwich's lifetime tracker. Here home owners' pay 2.47 percentage points above the Bank Rate (giving a current rate of 2.97pc) for the life of the mortgage. This also has an offset option, is available for loan up to 70pc of a property's value and comes with a £1,499 fee.
The best fixed-rate deal at the moment is from First Direct, charging 3.49pc for a two-year fix. Again this is only available to those with substantial equity (40pc) and comes with a hefty fee (£1,298).
Anyone thinking of remortgaging through should be aware of the potential pitfalls of some of these deals. The cheapest mortgages are invariably discounts now, as opposed to trackers. These follow the lenders' own SVR rather than the Bank Rate. This means there is no guarantee that rates will not move in line with the Bank Rate. HSBC, for example, has only cut its SVR by 2.31 points between October and March last year, despite the fact that the Bank Rate fell by 4.5 points.
Those who want a tracker, which guarantees to follow interest rates, should look at First Direct's tracker deal – paying 2.29 percentage points above Bank Rate for life. This gives a current pay rate of 2.79pc.
Lenders should also be wary of "overhanging" redemption penalties. The Woolwich deal, for example, recently launched a super-low tracker rate at 1.98pc for a year but there is a 2pc penalty to pay if borrowers want to move within two years.


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'Mr Sparkles' in court over mansion mortgage scam

A FORMER Dewsbury carwash owner and his brother scammed banks to pay for a Mirfield mansion, a court heard.
The prosecution say Mohammed Azam Yaqoob, known locally as ‘Mr Sparkles’, got his brother Mohammed Mahmood Yaqoob to apply for a mortgage to pay for his home on Huddersfield Road.

But Mahmood Yaqoob lied about his modest earnings to get the £274,350 loan from the Bank of Scotland in December 2002.

Jurors at Leeds Crown Court heard that in May 2004 Mahmood Yaqoob lied again about his earnings when he applied for a £399,951 remortgage to fund renovations on his brother’s home.

He told the Birmingham Midshires Building Society he earned £134,000 a year which was not true.

And again in March 2007 he applied for a £500,000 remortgage with Abbey, claiming he earned £123,500 a year – around three times his true salary.

Prosecutor Graham Reeds said Mahmood Yaqoob applied for a self-certification mortgage on each occasion because only the most basic checks would be carried out and he knew he could lie with little comeback.

He said the legal title of the house was in Mahmood Yaqoob’s name but Azam Yaqoob treated it as though it were his property. He said: “Even though Mahmood appeared to be the one meeting the repayments from his account, it was in fact Azam who financed the mortgage by making payments to Mahmood.”

He said that in one application Mahmood Yaqoob listed his address as the Mirfield home and his status as owner and occupier.

But Mr Reeds said: “Mahmood never occupied that house – not at the time of the application, not now, not ever.”

He said the jury would hear evidence the house really belonged to Azam Yaqoob and by using money fraudulently obtained by his brother to buy and renovate it, he was guilty of money laundering.

He said all but one of the planning applications for the house were made in Azam Yaqoob’s name.

It was Azam Yaqoob who sat with legal advisors during a planning enforcement appeal while his brother sat in the public gallery.

And it was Azam Yaqoob who told Kirklees planning enforcement officer Paul Wood that “this mortgage is costing me a fortune.”

The court also heard allegations that the brothers benefited from a fraudulent claim against Oldham-based engineering insurance firm HSB. The fraud was carried out by two Dewsbury men, who paid Azam Yaqoob £115,000.

Mr Reeds said: “He knew it was the proceeds of crime but he took it anyway.”

Azam Yaqoob, 40, of North Road, Ravensthorpe denies one charge of fraud and one of money laundering.

He also denies three charges of theft from HSBC and one charge of money laundering relating to the HSB fraud.

Mahmood Yaqoob, 35, of Sackville Street, Ravensthorpe, denies three charges of fraud. He also denies one charge of acquiring criminal property relating to a £800 payment from his brother following the HSB fraud.

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The mortgage conundrum - fix or tracker?

here have been a few more positive signs emerge concerning the housing and mortgage markets: Nationwide Building Society's latest house price index revealed that prices rose for the third month in a row in June, while mortgage approvals have risen in five consecutive months according to Bank of England figures.

However, it's not all positive news - consumer confidence and demand might be improving but borrowers are still facing a huge shortage in choice when it comes to mortgages. The number of tracker products available has plummeted 81% over the past 12-months, according to research we've done here at moneysupermarket.com. And even though wholesale borrowing costs are at a 20-year low and the Bank of England base rate hasn't changed since March, mortgage rates are still climbing.
Louise Cuming, mortgage expert at moneysupermarket.com, said: "The fall in the number of mortgages, highlights how the last 12 to 18 months have seen a complete meltdown in the market. Coupled with that, we've got mortgage rates that are completely divorced from the wholesale borrowing rate and to add insult to injury, mortgage rates are at their highest level for months. It's a stark reminder that lenders call the tune and competition is no longer the name of the game."

The advice to anyone looking for a mortgage is therefore: don't hang around.

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Homeowners in a fix over tracker rates

The housing market continues to show signs of recovery, but experts reckon it is too early to say if it will be sustained and predict there will be no rise in interest rates when the Bank of England Monetary Policy Committee meets this week to decide if the base rate should stay at 0.5%.



Confident: Peter and Christine Owen believe their tracker mortgage will leave them better off than a fixed-rate
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Mortgage approvals are rising and Nationwide Building Society said on Thursday that house prices had risen for the third consecutive month in July.
For borrowers looking to remortgage as their current deal comes to an end, the dilemma of deciding between a fixed or tracker rate has never been thornier.

The difference between the best fixed rates and tracker deals has widened in recent weeks as fixes have become more expensive.

As a result, some trackers have started to look more attractive.

For example, Alliance & Leicester, now part of Spain's Santander, has a two-year tracker at 2.45 percentage points above the base rate, giving a starting pay rate of 2.95%.

By comparison, the best two-year fix is with First Direct at 3.34%. The best five-year fixed rates start from 4.8%.

'Borrowers who want payment certainty should always fix,' says Ray Boulger at mortgage broker John Charcol.

'But for those who are prepared to gamble that low interest rates will be with us for a long time, a tracker may be the better option.'

At the moment, Boulger prefers lifetime tracker deals with no exit penalties. These allow borrowers to enjoy low rates, but with the option to fix at a later date if rate rises start to become financially uncomfortable.

Homeowners with at least 40% equity in their property can get a lifetime tracker with HSBC at 2.24 points above the base rate.

Peter and Christine Owen from Barnoldswick, Lancashire, have just opted for a tracker loan because they are confident interest-rates will stay low.

But their loan with Alliance & Leicester has penalties if they want to switch to a fixed rate in the first two years.

The rate on their loan tracks at 2.59 points above the base rate, giving a starting pay rate of just 3.09%. It is available to borrowers with at least a 30% deposit or equity in their home.

'The tracker was lower than any of the fixed rates we were being offered by lenders,' says Peter, 54, director at a builder's merchants.

'We have flexibility in our household budget so if rates do rise over the next two years we could cope. My view and hope is that we will end up better off overall than if we had taken a higher fixed rate now.'

Peter and Christine, 50, who have two grown-up children and are proud grandparents to Jack Peter, born in April, paid a £995 arrangement fee, but got their valuation and legal costs on the remortgage refunded on completion.

David Hollingworth at broker London & Country in Bath, Somerset, says that highly competitive tracker deals are still available for borrowers who can afford to take more of a gamble on future rates. But they must act fast.

'The mortgage market is still volatile with deals being changed and pulled weekly,' he says. ' Borrowers should get advice well in advance of their current mortgage deal coming up for renewal.

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Bank of Mum and Dad reopens for business as children struggle

How much would you sacrifice for your children? An awful lot probably. How about signing over a portion of your home so that they can own theirs? That is precisely what thousands of parents are doing by releasing equity in their own homes.

"We have seen a sharp increase in the number of clients who are saying they need the money to help their kids either get on the property ladder or to help them move out of negative equity," said Dean Mirfin, a director at Key Retirement Solutions, an independent financial advice (IFA) firm specialising in equity release.

Key's internal client statistics show that 36 per cent of people buying an equity release product gave helping their children with property as a reason, up from 25 per cent two years ago.


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Battle over legal costs could derail B.C. polygamy case

Winston Blackmore and James Oler -- the two B.C. men charged with a single count each of practising polygamy -- both pleaded not guilty and elected trial by judge and jury.
Both men are fundamentalist Mormon leaders from Bountiful who believe that a man needs multiple wives to enter the highest realm of heaven.
Their beliefs diverged from the mainstream Mormon church in 1890 when the Church of Jesus Christ of Latter-day Saints renounced the practice of polygamy.
The next stage is a preliminary inquiry in Cranbrook. A date has yet to be set, but special prosecutor Terry Robertson expects it will be in late fall and could take up to 20 days.
However, the whole process could still be derailed by Blackmore's unusual application to the B.C. Supreme Court that will be heard June 29 and 30.
Justice Sunni Stromberg-Stein has been asked to either: stay the criminal charge because of what Blackmore's lawyer Joe Arvay says has been an abuse of process; or stay the charge unless the provincial government agrees to pay the legal costs for Blackmore's team of lawyers at the same rate that Robertson and his team are being paid.
For the first part, Arvay will argue that Attorney-General Wally Oppal interfered because he went against the recommendations of his ministry staff, legal opinions given by two retired and respected judges more than a decade ago, and more recent opinions given by two special prosecutors.
But what's unusual is the second option. Arvay is asking that Blackmore get government funding without making any financial disclosures.
If Stromberg-Stein agrees to order the government to pay Blackmore's legal costs, it would set a precedent for all future funding for impecunious defendants.
Currently defendants have only two means of getting public funding. One is legal aid, which rejected Blackmore's application. The other is by making a Rowbotham application to a judge who decides based on extensive disclosure and examination of the applicant's finances.
Arvay will argue that no individual should have to bear the cost of a constitutional test case that has broad public implications.
Blackmore put it more plainly on his blog: "Just suppose that some foreign force attacked our Canada and sent in their army to destroy it, would you think it prudent, wise or fair, for the government of Canada to call on one farmer from out west to defend the nation with proceeds from his grain crop?"
Arvay is right to argue that this is an important case with implications far beyond either his client's or Oler's interests since it could reset the legal limits of tolerance toward religious practices.
There can also be no argument that for justice to be served, it shouldn't only be the Crown's interests that are represented by the best lawyers.
But if Stromberg-Stein orders the province to pay Blackmore's costs, it would mean that taxpayers would then be on the hook for the full legal costs in any trial with constitutional implications, regardless of a defendant's ability of defendants to pay.

(First in line would be Oler. His lawyer Robert Wickett has not yet joined in Arvay's application, but if it's successful, Wickett said Friday it would be in his client's best interest to file a separate, similar application.)
I'm not sure that what Arvay is asking for is reasonable, especially since there are other complex or worthy cases of broad public interest that aren't eligible for public funds.
My colleague Ian Mulgrew, for example, wrote in January how we may never know what happened aboard the BC Ferry that sank, killing two people, because the victims can't afford the exorbitant court fees. He quoted lawyer Peter Ritchie saying, "Unless you are wealthy in B.C., you cannot go to court."
Still, you can't blame Blackmore and Arvay for trying to avoid making a Rowbotham application. These are complex at the best of times. But just as a start, to determine the household income of a family with many wives (some of whom work), Blackmore would have to list them all, and that could mean more names added to the indictment.
They'd have to deal with another very sticky issue. In Bountiful, most of the property is held communally. But Blackmore is the president and/or director of several companies.
Are they his companies or the community's?
Revenue Canada is currently battling Blackmore over some of those issues. The next hearing on Blackmore's case in the Tax Court is scheduled for only a few days before Stromberg-Stein hears the application.

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In the end, it may be legal bills that sink the polygamists

These are tough times for fundamentalist Mormon polygamists.
The criminal charges -- one count each of practising polygamy -- against Bountiful's two leaders, James Oler, 44, and Winston Blackmore, 52, are expected to end up in the Supreme Court of Canada because their defence is that the Constitution guarantees their right to freedom of religion and polygamy is one of their beliefs. Their legal costs could be $1 million or more.
Even in good times, that's a lot of money for men with multiple wives and, in Blackmore's case, 119 children. But these aren't good times.
Forestry, the backbone of Bountiful's economy, has tanked.
Oler Bros. Contracting -- a company owned by Oler's half-brother, Ken -- filed for bankruptcy on April 14. With only $2.98 million in revenue and liabilities of just under $4.8 million, Oler Bros.' first meeting with its creditors is scheduled for today in Red Deer, Alta.
It is one of Bountiful's largest companies and one of the largest employers of members of the Fundamentalist Church of Jesus Christ of Latter Day Saints (FLDS). Even without paycheques, these men will be hard-pressed to help pay for the legal defence of their bishop, James Oler.
It's not like they can sell land or remortgage their houses. Almost all of the property in Bountiful is held in trust. Initially, the United Effort Plan was controlled by the FLDS, but in 2005 a Utah court granted control of it to an independent trustee who has been attempting to convert the communal property back to individual ownership in both the United States and Canada.
Trustee Bruce Wisan has sold some of the land in Utah and Arizona to cover his fees, but he's still owed more than $2.6 million US.
(Oler, Bountiful's bishop, had his bail conditions altered so he could attend a United Effort Plan settlement conference in Salt Lake City last week. No settlement was reached.)
Wrangling over the United Effort Plan is only part of the FLDS's massive legal bill that includes the defence of prophet Warren Jeffs, who has already been convicted in Utah as an accomplice to the rape of a 14-year-old, and is awaiting trial in Arizona. He and six other FLDS men also face charges in Texas relating to plural marriages to underage girls.
Oler, a heavy-duty mechanic whose indictment lists three "wives," has few assets -- two pieces of property with homes on them valued at $636,400. However, Oler's lawyer Bob Wickett says his client will not be applying for either legal aid or for a court-appointed lawyer.
But Blackmore's financial troubles are bogging down the criminal prosecution. So far, neither man has entered a plea because Blackmore claims he doesn't have enough money for a lawyer.
Former Liberal MLA Blair Suffredine represented him at his first two appearances. Now, Joe Arvay is Blackmore's choice for his defence that rests heavily on his belief that the law is unconstitutional because it infringes on his right to freedom of religion.
But Arvay will defend Blackmore only if he's paid, and legal aid has already rejected Blackmore's application. Now Arvay is preparing an application for court-ordered financial assistance.

On his blog, Blackmore recently explained why he believes he's entitled to taxpayer funding.
"Just suppose that some foreign force attacked our Canada and sent in their army to destroy it, would you think it prudent, wise or fair, for the Government of Canada to call on one farmer from out West to defend the nation with proceeds from his grain crop, and with his gopher rifle and own ammunition . . . while the rest of Canada sat by and watched the show?
"This is not just about our faith . . . This is an attack on the basic freedoms that we should all enjoy and every Canadian should defend it."
In the past decade, Blackmore -- whose indictment lists 19 wives -- has gone from having nearly $6 million in assets to near bankruptcy.
In 2003, Blackmore failed in court to regain control of the Bountiful elementary-secondary school and its land from the United Effort Plan. The next year, Revenue Canada sued him in federal court for payment of $465,427 owing in income tax and GST, which he finally paid in 2006. In the last four years, Blackmore and his companies have forfeited close to $3 million worth land in Alberta and B.C. because they couldn't pay the mortgage or the taxes.
It may not be the intent here. Still, it bears remembering that faced with intractable and unwanted groups such as the Mafia and Aryan Nations, the U.S. government didn't break them through incarceration. It bankrupted them.

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