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Leader: Going too far

It seems not a week goes by without another example of lenders’ overzealous attitudes to regulatory reform. We have already seen the bizarre lines of questioning by some as part of their MMR affordability checks, and the failure to follow transitional rules to help borrowers trapped on high SVRs.

Now the next stormclouds are gathering: LTI cap rules from the Bank of England. Despite the rules not applying until October, lenders including Lloyds Banking Group, Royal Bank of Scotland and Nationwide have introduced LTI caps.

The moves have left brokers questioning whether the FCA and the Bank are pulling in different directions – the former putting the spotlight on affordability as a whole while the latter adopts a narrower focus by restricting high-LTI lending.

So it rankles somewhat to hear Imla chairman Charles Haresnape say brokers are overreacting by suggesting there is a conflict between the MMR and the Bank-imposed LTI cap. 

As we report this week, the feeling among brokers is if anyone is overreacting it is lenders themselves, as evidenced by the number of them jumping the gun on the cap. Haresnape argues the latest regulatory changes will not see a significant reduction in lending, but brokers are not so sure.

Clearly, lenders want to stay on the right side of the law, whichever regulatory body happens to be laying it down. But the ever-tightening criteria across all fronts just results in brokers, and borrowers, being caught in the crossfire. 

Brokers need to know where they stand when it comes to submitting applications. Lenders, the FCA and the Bank must work together to ensure good applicants are not losing out due to an overly cautious approach to compliance.



Marketwatch: We are in a rare period in the history of mortgages

So it is midsummer and for those of you reading this on the beach sipping a brightly coloured cocktail with an overlarge umbrella and some as yet undiscovered fruit on the side, er, why are you reading about mortgages? We are in a rare period in the history of mortgages. There has already been some […]

Tom Cleary

60 Seconds with…Start Financial Services manager Tom Cleary

How do you think the Bank of England’s LTI limits will affect lending in the short term?  The LTI caps will not have a significant effect because the majority of lending is well below 4.5 times income anyway. But the Bank is sending conflicting messages to lenders because the whole point of the MMR was […]


Five ways to make your employee focus group session a success

by Debra Corey, group reward director  You just planned and booked what you thought was the perfect vacation for you and your family. You call everyone together to share the great news and instead of receiving sounds of glee and delight, you receive groans and complaints.Your youngest says: “I hate beaches, didn’t you know that?” (You think to […]

Building long-term relationships

Call us old fashioned, but we want to get to know you personally. That’s why we give you a named case manager and underwriter to look after all your cases from start to finish. Your underwriter will happily give you their number, so you can ring them directly with any questions you have. And your […]


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