KnowledgeBank – Daily criteria update 14/05/2020

Let’s get cracking with your latest update……

Lenders who have paused accepting new mortgage applications:

  • None

Lenders who have reinstated lending:

  • Foundation Home Loans have announced that they are resuming lending for both Residential and Buy to Let. Their new range of products will be available from Monday 18th May

Changes to income and affordability restrictions:

  • HSBC have made the following changes to criteria:
    • Foster Carers income is now accepted but is treated as self-employed income however, they won’t ask to see accounts as they would on normal self-employed cases. They will require a letter from the foster agency confirming the total foster income received for each of the last 2 years at the point of application, the number of children currently in their care and if there are any known foreseeable changes in their level of income. For the affordability calculation, you need to put 100% of the evidenced income in the self-employed net profit fields. You will also need to put the number of children currently in their care down as dependents
    • Self Employed Income from Limited Companies you are no longer required to provide signed finalised financial accounts. Instead, their underwriting team will validate finalised accounts (whether signed or unsigned) with the information contained in the latest years’ accounts filed with Companies House
  • NatWest are changing the way they assess self-employed income from Friday 15th May for both Residential and Buy to Let applications. When assessing affordability you must use the lower of:
    • The average of the last two years net profit
    • The most recent years net profit
    • The confirmed government income support amount

Changes to occupation restrictions:

  • None

Valuations

Physical Valuation Updates and associated criteria

  • Fleet Mortgages have resumed physical valuations in England for both pipeline cases and new applications
  • Nationwide for Intermediaries are resuming physical valuations in England. For applications on hold that weren’t suitable for Desktop Valuations, they will contact the vendor/applicant directly to arrange to get the valuation booked in
  • Shawbrook Bank are resuming physical valuations and these can be instructed via their Broker Hub
  • The Mortgage Works (TMW) are resuming physical valuations in England. For applications on hold that weren’t suitable for Desktop Valuations, they will contact the vendor/applicant directly to arrange to get the valuation booked in

Desktop Valuations

  • Buckinghamshire Building Society have announced their new range of products that qualify for Desktop Valuations subject to the property mortgaged being suitable for an AVM
  • Masthaven Bank can now use Desktop Valuations for bridging cases up to 60% LTV

Property Restrictions

  • None

Loan Sizes

  • None

Property Values

  • None

LTV Reductions

Residential

  • None

Buy to Let

  • None

LTV Increases

Residential

  • None

Buy to Let

  • None

Product Transfers

  • None

Industry News
We can’t top last night’s industry news that’s for sure! But today we learned that the Financial Conduct Authority (FCA) are introducing a series of temporary measures that will help customers with insurance and premium finance products who are in difficulty due to COVID-19. These will come into force from Monday 18th May and will be reviewed again in the next three months and revised if needed. The measures include allowing customers to request a payment deferral at any point up to 18th August 2020 and also asking firms to offer reduced payments, terms, end dates, etc. as well as reassessing customer’s needs to see whether the cover needs to be revised or whether a more suitable product is available. You can read about who is affected and what the FCA are trying to achieve here on their website and then read in more detail here about the guidance and rules that come into effect on the 18th May.

In some cases, there have been additional restrictions placed on things like loan sizes and property values to enable the lender to do Desktop Valuations. You’ll find these have been amended by the lenders in the relevant criteria categories on Knowledge Bank. There are also the “lender announcements” under the lender’s logos in the search results to alert you to anything you need to be aware of before placing the case. To see these features and much more, log in to Knowledge Bank here.

Our Lender Relationship Manager, Matthew Corker comments:

“Nationwide for Intermediaries and TMW have asked that you don’t call them to check on valuation dates as this information will be updated in real time available on their online Case Tracking when the valuations are arranged. For the cases that were on hold because they didn’t meet their criteria for a Desktop Valuation, they aim to have everyone booked in by the 29th May however, this is subject to an initial safety assessment and customer agreement but assuming it’s safe to do so, they anticipate that most valuations will be carried out before 12th June.

It was great to see Foundation Home Loans announce their re-entry back into the market and their new suite of products available from Monday. These will include Buy to Let products for both individuals and Limited Companies with no ERC’s up to 60% LTV. The new Buy to Let range will also include other products up to 75% LTV. HMO and Large HMO lending is also available on their Buy to Let ranges. There is also a new specialist Residential range launching up to 75% LTV and again, some of these products will have no ERC’s either. Well worth checking out their new range when it launches on the 18th May.

NatWest have made some significant changes to the way they assess self-employed income. It’s really important to note that these changes are also going to apply to applications that have already been submitted but have not yet completed either where you have informed them of a material change to the application or where your client has contacted them directly to make them aware of a change to their self-employed income. They have told us though that they do not expect you to proactively review your pipeline.

They have also made some temporary changes to their self-employed packaging requirements for all new business. They require the completion of a Supplementary Information Sheet as part of the required packaging when you submit a new application where one or both of the applicants are self-employed. They have said that they won’t progress any application without the correct packaging requirements being complete. One other point to note is that they will be looking to ensure at underwriting stage that they are satisfied that on-going affordability can be evidenced and if this isn’t possible, they will decline the case and you won’t be able to appeal the decline. Where your client’s income has been negatively impacted by COVID-19, they aren’t eligible for the government Self Employment Income Support Scheme and their revised income fails affordability assessment, NatWest will not be able to assist them at this time so you shouldn’t submit an application.

Finally, for those with an interest in Buy to Let, Precise Mortgages are hosting a live webinar tomorrow in association with FIBA where Roger Morris, Precise’s Group Distribution Director, will be giving an overview of the Buy to Let landscape and legislative changes. The date and time is Friday 15th May at 2pm and you can register register here as well as see more detail on the content being covered. Roger is a great presenter and extremely knowledgeable so I’m sure it will be a great session for those with an interest in Buy to Let.”