HSBC - Execution Only - Securitisation...

steveh2001

Hi

I've got a remortgage offer from HSBC through an online execution only application and have been fine with the process up until it mentions securitisation.

It did not mention this in the quote KFI, but it does in the offer KFI.

It alludes to the fact my mortgage could be sold to another lender and (in exceptional circumstances) I could have to deal with another lender.

-is this normal for all lenders?
-should I be worried?
-is it because I did the application execution only?
-anything else I should know?

There is not a lot mentioned about it in mortgage guides so it makes me wonder if it is normal...!

Thank you
Steven

Edi81

Totally normal.
Securitisation of mortgages is normal but it's not transferring to another lender. It's a way for banks to access funding.

The other condition about another lender is also standard. They can sell their loan book to another company if they wish. It doesn't mean that you will have a change of terms.

steveh2001

Thanks, it was freaking me out reading about securitisation was the cause of the 2008 housing crash!

I don't remember seeing this in the KFI when I took out my main mortgage with Bationwide in 2009, so maybe it's new.

davidmcn

steveh2001 wrote: »

I don't remember seeing this in the KFI when I took out my main mortgage with Bationwide in 2009, so maybe it's new.

Might not have been in the KFI (not convinced it needs to be as it doesn't affect your deal) but I expect it would have been in the conditions somewhere.

kingstreet

steveh2001 wrote: »

Thanks, it was freaking me out reading about securitisation was the cause of the 2008 housing crash!

Securitisation was around for over 20 years before that.

What caused the problem was the bundling of sub-prime lending with prime homeloans in each RMBS by certain US banks.

The buyers of the RMBS couldn't identify what was good bad or indifferent among their securities, so trust disappeared.

UK high street lenders do what happened at the outset of securitisation, only bundling prime with prime to ensure a (eg) AAA credit rating.