View more on these topics

Call for brokers to check clients’ credit

Openwork and GMAC-RFC have called for brokers to use credit checks when searching for sub-prime products to minimise possible discrepancies when cascading takes place.

Paul Shearman, mortgage proposition director at Openwork, says: “Cascading will push down a mortgage if any part of a client’s credit check is declined, and that should always be avoided in sub-prime.

“Without a credit check it is difficult to get past the problems that cascading can bring to sub-prime searches. Many of our brokers use checks to help their clients.”

Peter Izard, senior manager of corporate accounts at GMAC RFC, says: “GMAC-RFC encourages brokers to advise clients to access their credit histories from one of the credit checking services available.

“To avoid problems, we always try a mainstream product on clients who have adverse credit as this might be of a historical nature and might not affect their chances of getting a mainstream mortgage.”

These steps have been criticised by some as they do not solve the fun-damental issues of cascading in sub-prime searches.

Shaun Ginley, proprietor of East Anglia-based Magic Mortgages, says: “The problem comes when you have to go back to the sourcing system after a cascade. There’s no way of knowing what a client’s problem is. It may be a big issue or simply adverse credit that could be accepted by another lender.

“If credit checks are such a necessary tool why aren’t all intermediaries doing checks? There are numerous credit services on the market but they all give different results. A customer could need up to three different checks to be fully updated, which all takes time and money.”

He adds: “There is no reasonable solution to this problem without lenders making intermediaries aware of what clients’ problems are if they are refused.”


A&L’s procedures do not treat my clients fairly

From Rick Gifford I recently placed a buy-to-let application with Alliance & Leicester. It proved to be a pain since the buy-to-let applications can only be placed on paper, not online. Unfortunately, I had an old version of A&L’s application on the system and when the application was received it requested the correct form. I […]

Newcastle launches five-year fixed rate

Newcastle has added to its mortgage range with the launch of a five-year fixedrate mortgage at a rate of 5.05% until January 31, 2012.The product offers 95% LTV and a free standard valuation for remortgages worth up to £410 or a £250 cashback and is not subject to any higher lending charges up to 90% […]

US braces for a correction

Dutch bank ABN Amro Holding NV is contemplating selling its once celebrated US mortgage division.A spokesman for ABN Amro Mortgage – the nation’s largest wholesale lender a few years ago – declined to discuss the matter, citing a company policy not to comment on “rumours and speculation.” (Wholesale lenders originate loans through independent brokers).If ABN […]

RICS joins Tenancy Deposit Scheme

The Royal Institution of Chartered Surveyors has been approved as part of the Dispute Service component of the Department for Communities and Local Government’s Tenancy Deposit Scheme.Gillian Charlesworth, head of regulation policy at RICS, says: “RICS is delighted to be approved as part of Dispute Service component of the DCLG’s Tenancy Deposit Scheme, thus obtaining […]


News and expert analysis straight to your inbox

Sign up