Lloyds may give brokers chance to offer negative equity scheme
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Lloyds Banking Group says it will consider launching its negative equity deal through brokers if it proves a success.
Last week the lender revealed plans to allow existing Lloyds group borrowers in negative equity of up to 120% LTV to downsize, relocate or move to a bigger home.
The Second Steppers scheme will launch on February 2 and allow borrowers to move without raising their existing level of borrowing.
If a borrower wants to move to a property that is the same value as their current home they will be able to port their existing mortgage.
If they want to move to one that is worth more they will have to pay a second deposit to make up the difference.
Stephen Noakes, commercial director of mortgages at Lloyds group, says: “The key reason for launching through the direct channel is to make sure we understand the process and it works well. The scheme helps everyone in the industry because if we can get the housing market moving the benefits will be felt by all the chains.
“Depending on the progress we make we will definitely be looking at the intermediary market.”
Sue Anderson, head of member and external relations at the Council of Mortgage Lenders, has welcomed the scheme.
She says: “It does involve lending on what looks like more than a 100% LTV basis but it is a pragmatic solution that lowers the risk for the lender. We do not want to see a regulatory regime that precludes this from being a sensible solution.”
Jonathan Cornell, head of com-munications at First Action Finance, says: “A lot of people in negative equity have to move because their employers are relocating and if they don’t they could lose their jobs, fall into arrears and possibly face repossession.
“Without the co-operation of their lender many home owners are trapped by negative equity.”
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