Lenders unwind affordability stress tests
Back in the summer, when the BoE confirmed that it would withdraw its affordability test from August 2022, we wrote a blog questioning the timing. To recap, the requirement was introduced in 2014 with the intention of preventing loosening of credit assessments and to ensure that reckless lending would not cause an economic downturn putting […]
Service Level Agreement ‘SLA’ oversight
Regulators, including the BoE, PRA and FCA, are renewing their attention on how firms manage and control the third parties that they work with. Most regulated firms are used to working within the SYSC rules to manage third parties, but the new focus considers additional oversight in respect of critical third parties. One area of […]
Affordability and ‘breathing space’ arrangements
In May we discussed the UK Finance arrears data, but the situation is expected to get worse as mortgage rates continue to rocket. Coupled with the cost-of-living crisis households are understandably already feeling the strain. Some commentators are keen to talk down the risk households currently face, pointing out that mortgage rates, despite recent increases, […]
RICS demands more effective oversight
Regular readers of our blogs will be aware the focus is often based on the core themes of independence, oversight, culture and behaviours. The recent update from the standards and regulation board (‘SRB’) of the Royal Institute of Chartered Surveyors (‘RICS’) confirms a focus on similar issues – and we therefore support it. Many of […]
Taking the initiative with Staffing Solutions
We have commented on the need for staffing solutions in a previous update and we have had a lot of positive reaction from customers enquiring about how we can help. The last few months has seen a real upturn in confidence within the financial services sector, resulting in the need for extra staff to cope […]
Tick Box Underwriting
We have noticed an increasing number of articles in the trade press aimed at persuading lenders to move away from ‘tick box’ underwriting to a more personalised approach to assessing loans. The general concern seems to focus on the issue of a number of loans being turned down for being slightly outside the lender’s usual […]
Are customers getting a fair hearing?
It is not easy ensuring that operations areas within lenders and servicers are adhering to internal or external standards when dealing direct with consumers, particularly by telephone contact. There is a potential minefield of regulatory and compliance issues to consider. And with hundreds of call centre staff to supervise, how can organisations ensure their representatives […]
Risk Identification
When driving a car it’s obvious that you need to keep your eyes on the road ahead, but it’s a poor driver who does not look in the rear view mirror from time to time or learn from past driving experiences. Similarly within the mortgage industry we are all focused on the way ahead, hoping […]
Interest Only is it really a ticking time bomb?
The MMR clearly retains the overarching ‘responsible lending’ rule, but one of the key elements of the reforms specifically focusses on interest only. In a nutshell, from April 2014, when the new rules kick in, lenders must assess affordability on a capital and interest basis, unless there is a clearly understood and believable alternative source […]
The Importance of Valuation Instructions
Phimister v DM Hall LLP [2012] CSOH 169 The issue was the scope of the surveyor’s duty to a purchaser. Phimister sought damages from DM Hall for professional negligence in respect of a mortgage valuation report, on the grounds that the firm owed him a duty of care to check the area of the property […]
