SEISS/Mortgage application

mobilejo

justwhat said:

mobilejo said:

The algorithm seems logical, even if the end result in a select few cases may be unfair.
A SEISS claim = income adversely affected by CV. 
Adversely affected this time = likelihood of being adversely affected again if a repeat of these circumstances, but next time these grants probably won't be available again.

Lenders appear to be prudent with who they lend to. Makes sense to only lend to people whose income is less at risk from something that could very well happen again and can have big consequences when it does happen. Its a real life stress test and is useful information for an underwriter.

"A SEISS claim = income adversely affected by CV" 
That's not how SEISS works. (its only a small part of it). And there can be no effect on turnover/income.
Dont get me wrong anyone who has claimed SEISS should go to an underwriter. But to assume its income based issue , is just wrong. 

One of the official criteria for a SEISS claim is "business adversely affected by CV". I understand that many traders who have been barely affected (if at all in reality) are making these claims, but by doing so they are certifying that they have been adversely affected - whether in reality that is true or not is a different matter.

They can't ask the government to treat them as adversely affected to get the grant, but then ask the bank to ignore the fact that they said they were adversely affected.

I understand the point you're trying to make - its not lost on me that almost any trader could justify a SEISS claim for even the smallest adverse effect on business. But those nuances are going to be lost to the mechanical thinking that big banks need to employ.

Some lenders are happy to look at cases on an individual basis - so your trader that only had to buy some PPE should sail through at underwriting. But some banks just need a broad brush to eliminate anyone that may be a risk and making a SEISS claim is a self certification that CV had some level of adverse effect on your business. That is clearly enough for some banks to say no upfront.

Ultimately, if the banks' policy was going to lead to them ending up with no potential customers, they'll quickly change course. They also won't hold it against traders forever - at some point it will become irrelevant. But right now it seems like a logical thing for a bank to tread cautiously.

EDIT: I may have missed your point in my reply - you are saying that "income adversely affected by CV" is not the same as "business adversely affected by CV", which is true. e.g. Income could be equal or increased, but expenses could have increased. Or an expected increase in business may have not materialised because of CV. Or many other things that haven't actually reduced income but have adversely affected business. 

justwhat

mobilejo said:

EDIT: I may have missed your point in my reply - you are saying that "income adversely affected by CV" is not the same as "business adversely affected by CV", which is true. e.g. Income could be equal or increased, but expenses could have increased. Or an expected increase in business may have not materialised because of CV. Or many other things that haven't actually reduced income but have adversely affected business. 

Yes lol 
Income or turnover is not a criteria that MUST be effected to claim SEISS.  

mobilejo

justwhat said:

mobilejo said:

EDIT: I may have missed your point in my reply - you are saying that "income adversely affected by CV" is not the same as "business adversely affected by CV", which is true. e.g. Income could be equal or increased, but expenses could have increased. Or an expected increase in business may have not materialised because of CV. Or many other things that haven't actually reduced income but have adversely affected business. 

Yes lol 
Income or turnover is not a criteria that MUST be effected to claim SEISS.  

You are right in that.

But for a lender, business adversely affected is still an issue, even if income remained equal. Looking forwards, if there is a second, third, fourth wave, that adverse effect could be much worse on the next go round, to the point that income could well be affected next time.

Of course that won't be true in every case, but if a bank is looking for a broad brush with which to sweep away large numbers of applicants without case by case assessments (which they seem to really enjoy doing, coronavirus or not), a SEISS claim is very convenient for them. It just allows them to continue with their cherry-picking of what they see as the ideal borrower.

I'll admit its a very inhuman way of operating to judge every case with a yes/no algorithm, and I get the frustration of borrowers. I don't expect any different from big banks though.