A. It has not really been relevant so far as most of our business is in 5-year fixed rates and little has reverted yet. We are actively working on a product transfer option. The other constraint is that a product transfer requires a repurchase from an existing securitisation into a new securitisation – this is difficult to do while the securitisation market remains dislocated.
A. When we return to lending, the proposition will be a more conservative (and we have always been somewhat conservative on New Builds even by specialist lender standards) at least for a while.
A. Typically, it will cause very safe credit (mainstream mortgages to employed people on strong incomes at low loan to value) to be priced very cheaply, but anything slightly riskier to become very expensive.
A. Yes. We don’t believe the market will crash, but values will be depressed for a while and any forced seller may take significant losses. However, we take a lot of comfort that house prices have grown only moderately prior to this crisis – this was very different in the run up to the credit crunch twelve years ago.
A. We are actively investigating this and hope to incorporate this into our range. However, we believe securitising lenders like ourselves will move cautiously as we have to take rating agencies and investors along on the journey.
A. The conveyancing process does seem especially slow and difficult to influence for lenders, brokers and customers alike. But I admit I may have over-generalised with that statement (I am a solicitor myself, as it happens).
A. Yes, we believe warehouse lenders will have a reduced appetite for risk and the amounts they lend in the immediate future. As a long-established player with a strong balance sheet, we believe we will be less affected but higher warehouse pricing and tighter warehouse criteria will feed through into more expensive and more conservative products.
A. This is a good question. Thanks to our legacy mortgage book from the pre-credit crisis days, we have a lot in-house experience in managing customers with payment difficulties and will we create plans that allow customers to catch up on mortgage payment holiday amounts which reflect their means.
A. Yes. We don’t believe the market will crash, but values will be depressed for a while and any forced seller may take significant losses. However, we take a lot of comfort that house prices have grown only moderately prior to this crisis – this was very different in the run up to the credit crunch twelve years ago.
A. Criteria will be more conservative for a while.
A. Various types of income protection or business interruption policies may well help moderate the impact. We will also start exploring policies protecting lenders.
A. We can see that happening. We are not interested as a lender in selling or brokering insurance but we may insist on customers having it in place.
A. I think working with protection providers on ways that continue to make contractor and self-employed and entrepreneurs like buy-to-let landlords eligible for mortgage finance at competitive rates will be a key area of innovation.
A. That is a good question. We will certainly explore it with them.
A. We will focus on completing the post-offer pipeline. Anything pre-valuation may have to be repriced in light of the dramatic increase in our cost of funds.
A. As we said during the webinar, we expect the mortgage payment holiday scheme to be extended beyond three months and we suspect that the furlough scheme will also be extended, at least for certain sectors (like travel and hospitality – which would not be so helpful to business like yours or ours).
A. Yes, we will do more of that. However, many of these technologies are not fully proven for mortgage products where the underwriting, KYC, AML etc process may come under scrutiny ten or even twenty years later – we still have loans from 1998 and experience some interesting challenges.
A. We think the disruption will be temporary. At least some of us specialist lenders will soon be ready again to meet your customers’ needs.
A. It would be impossible for a lender to find out (e.g. by asking for bank statements from this period). We are getting many genuinely needs based requests for mortgage payment holidays and will not be holding these against these customers.
A. Imminent redemption is not a factor for granting mortgage payment holidays – the money would have to be repaid in full on redemption so I would not consider that a problem.
A. We have withdrawn our fee free products – part of our cash preservation strategy.
A. The answer is, sadly, no. The best defence is to run our businesses properly but we will still have to invest time batting away their spurious claims.
