Today: Last Update:











Poll

Are video applications next for the second charge market?



Fluent: Regulation not to blame for rigid underwriting


underwriting

Advisers should not think that nothing more can be done for clients when lenders tell them that regulation is responsible for the increasing number of mortgage cases that fall through at the underwriting stage.

This is especially true for capital raising cases when brokers ought to be considering a second charge option.  

While regulation has rightly made all lenders take stock of their underwriting procedures, it's wrong for first charge lenders to use the excuse that regulation is to blame for cases falling through.

Of course, there was always going to be a tightening of criteria and lending policy, but the more I hear that regulation is to blame, the more it seems to sound like the current trend of placing every problem at the door of the Brexit vote.

The truth is that regulation is all about interpretation rather than hard and fast rules. Unfortunately, many first charge lenders have conveniently decided that if they say ‘no’ more than they say ‘yes’, they are unlikely to fall foul of the regulator.

The concept of having faith in the quality and experience of underwriters, their interpretation of lending policy and the regulatory framework has been substituted by many lenders with wholesale reliance on credit scoring, computer generated underwriting and general box-ticking.

Thankfully, second charge lenders have demonstrated a more measured approach to regulatory requirements. While they have positively adjusted their underwriting and criteria, they have largely been prepared not to go down the computer driven path like their first charge counterparts and stayed loyal to a more human approach of looking at cases in the round, rather than making them conform to a rigid template. 

I would urge more advisers to be sceptical about those lenders that look to blame the regulatory structure to cover their own over cautious underwriting approach and compare it to the confident yet compliant alternative offered by the second charge sector.





Post your comment:

I well omega replica watches removed them, in I below. Those companions call fake rolex watches sounded like a bird chirp. Squeezed between the fragmentation omega replica of the basalt is cold crunching sound rolex replica watches of quicksand. Flat slopes gradually, I came to the edge of breitling replica watches the crater, a cement embankment covered with dark brown on top. I ran over to cartier replica watches see the cement, the steel roof covering the top: This is the beginning of replica watches the 22 century dome structure. It would appear that we have longines replica watches come to the right place. From my u boat replica watches current position.