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Arrears figures are not such good news


The Council of Mortgage Lenders’ Q2 arrears and repossession statistics are not the economic silver lining they might seem.

The decreases are probably attributable to the low interest rates and lender forbearance. If interest rates were not so low more people would fall behind with mortgage payments and repossessions would increase.

The drop in unemployment is also welcome news on the surface but is unlikely to be sustainable.

As the coalition government tackles the deficit and rips into the public sector, unemployment is likely to increase with people unable to make mortgage payments.

Government spending cuts will have a ripple effect as industries reliant on public spending cut back, leading to more unemployment and rising mortgage arrears. Growth in the private sector is unlikely to keep up with public sector decline.

While lender forbearance may be helping to keep repossessions low, Treating Customers Fairly considerations will need to be kept in mind to protect borrowers from unnecessarily high debt shortfalls.

If a borrower cannot meet payments or remortgage putting off repossession may not be best. All must be done to keep their home but in a managed way that protects both parties.

What happens if the situation worsens? Of even more concern is the possibility that debt advice and mortgage support schemes will be victims of the spending cuts, leaving people with nowhere to turn to for help.


Adverse market conditions force SLS to shut shop

Savills Lending Solutions blamed market forces as it officially closed its doors on Friday. Mortgage Strategy revealed on August 9 that SLS staff had been placed into consultation. Rob Jupp, formerly managing director of Personal Touch Packaging, joined Savills Private Finance in September 2008 to launch SLS. But in December 2009 all 11 staff at […]


Simple truth about lenders’ scorecards

Following on from last week’s column regarding scorecards I will attempt to debunk the differences between a lender’s lending policy and scorecards. Lending policies outline what type of lending it will accept and takes into consideration things like LTVs, income types, geographical rules, property type, and age of borrower among other things. If two lenders […]

Crown gets an upgrade from ratings agency

Fitch Ratings has upgraded UK servicer ratings for Crown Mortgage Management. It has also removed Crown from its Rating Watch Evolving status.

Show me the money – earnings are central to performance in Europe

Equity markets globally currently remain vulnerable to sharp shifts in sentiment caused by either unexpected or unwelcome outcomes in key upcoming political events (the US and German elections, Brexit and the Italian referendum). These top-down influences, combined with the current low global growth environment, will likely lead to broadly directionless markets, and prolong the current low beta return environment. We do, though, […]


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