A bit of news re porting a mortgage

Jhoney_2

http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/11310046/HSBC-the-latest-lender-to-block-mortgage-porting.html

It seems like there is a bit of clarity being brought to the attention of Lenders regarding the MMR with regards to how to assess existing customers.


"The regulator did introduce tough requirements in April but put in place “transitional arrangements” so that existing borrowers who don’t meet the new tests are not disadvantaged.
These allow lenders to approve changes to existing mortgages as long as the borrower does not want to borrow more or extend the term of the loan"


Hope it's useful

kingstreet

Debated regularly on here;-

https://forums.moneysavingexpert.com/discussion/4955808

amnblog

The issues in this case in the Telegraph seem to revolve around repayment strategy for what was an interest only mortgage.


Little wonder the Lender's are nervous as this is a stick that the FCA will most likely beat them up with at some future date - transitional arrangements or no.

kingstreet

I took a bit of a punt on the subject as the link won't open in Chrome.

amnblog

because it has two http:// sections in the front of it.

Jhoney_2

amnblog wrote: »

The issues in this case in the Telegraph seem to revolve around repayment strategy for what was an interest only mortgage.


Little wonder the Lender's are nervous as this is a stick that the FCA will most likely beat them up with at some future date - transitional arrangements or no.

They declined on affordability it says.

amnblog

Read the rest

Let_Us_See

Quite a difference between a rate switch/product transfer and porting a mortgage as in the Telegraph article.

Many lenders permit a rate switch/product transfer without additional documentation, but porting a mortgage has always included additional underwriting checks.

Does it make sense in this case? Of course not, but mortgages rarely do!

Jhoney_2

amnblog wrote: »

Read the rest

I had, but did as you suggested. At no point did they mention the IO as the reason for decline. It says affordabilty and then after enquiry that the decision stands.It was a spokesman who stated IO to the newspaper reporter.

"That was when things started to go wrong. To their surprise, the underwriter declined the application, saying the loan was not affordable.
When the Pinningtons queried this, they received an email saying: “I have spoken with the underwriter who assessed your case. Unfortunately, the decline decision still stands.
“Because you are moving to a new house we have to assess the mortgage application under current guidelines and we need to demonstrate that the mortgage is affordable to you now and if interest rates were to rise.”



I am simply citing the paper. I have to admit, I am still trying to make sense of the new rules, but i'm no financial expert. If i'm wrong, that's fine and thanks for letting me know.



Thanks KS for refering the above post.

TrickyDicky101

amnblog wrote: »

Little wonder the Lender's are nervous as this is a stick that the FCA will most likely beat them up with at some future date - transitional arrangements or no.

^ this is exactly the problem with the transitional arrangements. The FCA is at fault here, not the banks IMO.

amnblog

Jhoney wrote: »

I had, but did as you suggested. At no point did they mention the IO as the reason for decline. It says affordabilty and then after enquiry that the decision stands.It was a spokesman who stated IO to the newspaper reporter.

"That was when things started to go wrong. To their surprise, the underwriter declined the application, saying the loan was not affordable.
When the Pinningtons queried this, they received an email saying: “I have spoken with the underwriter who assessed your case. Unfortunately, the decline decision still stands.
“Because you are moving to a new house we have to assess the mortgage application under current guidelines and we need to demonstrate that the mortgage is affordable to you now and if interest rates were to rise.”



I am simply citing the paper. I have to admit, I am still trying to make sense of the new rules, but i'm no financial expert. If i'm wrong, that's fine and thanks for letting me know.



Thanks KS for refering the above post.

This section seems to suggest what was really going on:


the bank had clarified Mr Pinnington’s repayment strategy for the interest-only loan and was now “happy to approve his application”.


In short - borrowers unsurprisingly wanted to keep £190,000 of lenders funds at a cost of £37 a week


Lender allowed them to do so


Non-story really