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EXPO 2010: Interest-only changes have already hit Santander’s lending

Iain Laing, chief credit officer at Santander UK, says that the Financial Services Authority’s changes on interest-only have already affected 2% of its lending.

And speaking at the Mortgage Business Expo in London today, Laing went on to estimate that the Mortgage Market Review as it currently is will impair 20% to 30% of Santander’s current lending.

But he was positive about the likelihood would be of changes being made to the MMR.

He says: ““I honestly think that there everything to play for at the moment – the FSA was saying Q1 2011 to implement the MMR – now it has no specific date in mind and has acknowledged some of the rules could need redrafting.

“The FSA has set itself an impossible task – it can’t set rules that are both prudent and reasonable.”

In terms of affordability he cautioned that there were cases where it would be difficult to write specific rules to govern lending on them.

And talking about fast-track he says that in a worst case assessment 80% of its brokers were verifying income. Fast-track as a name he says will be retired but he argued that the lender would not have to make major changes to its processes.

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  • Chris Hulme 11th November 2010 at 3:49 pm

    Perhaps Santander need to look internally to identify the Fast Track issues:
    As a matter of course, we obtain proof of income and bank statements for clients and we apply for Santander’s Non Fast Track products yet it is Santander who make the decision on whether a case is Fast Track even if we request otherwise.
    Even when we send the proofs of income in to them, they refuse to look at them instead preferring to waste brokers time later down the line in retrospective requests for such proofs.
    Strangely enough, Lloyds Bank Group are taking a similar “Post Completion” step in ascertaining the repayment vehicle on Interest Only applications.
    My call to lenders is: ASK FOR THE DOCUMENTS AND PROOFS WITH THE APPLICATION – BROKERS DO HAVE THIS!!

  • Colin 11th November 2010 at 3:16 pm

    the issue regarding fast track abuse is almost a non entity now, unless i m naive, we have to get income verification on all cases for our files, if the lender chooses not to due to credit score then so be it. Abbey are randomly checking, as we asked this morning to evidence on an offered case. If you can t provide it, you are struck off the fast track panel. Alot of what the MMR is trying to impliment is already being meted ou by the contracting market as lenders continually make the criteria harder…..