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Lenders Worried They Will Have To Turn People Away!

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Nice article from Mortgage Strategy magazine - mortgage stress tests due at the end of April will mean more people are declined for a mortgage.

"Lenders increasingly worried stress tests could see declines soar"

This should mean the amount people can borrow is more limited than in the past. Some lenders (e.g. Nationwide) are introducing the stress testing requirements before 26th April.

This should add a bit more pressure to house prices B)

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Can't wait for the 'Mortgage rationing' propaganda, 'we must get banks lending again', etc. etc.

I can just see the photos of Cameron and Osbrown in the BBC news and CH4 prime time.

I think something like "The mortage industry could and should have done more to make their customers aware of these changes. We've asked the FCA to urgently look at how this scheme is being implemented and ensure it is being applied fairly for hardworking families. Until they report back I have taken the tough decision to postpone these changes to June 2015."

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I think something like "The mortage industry could and should have done more to make their customers aware of these changes. We've asked the FCA to urgently look at how this scheme is being implemented and ensure it is being applied fairly for hardworking families. Until they report back I have taken the tough decision to postpone these changes to June 2015."

....and in the mean time i am instructing the [independant] BOE to reinstate FLS for mortgages, mainly FTBers, this is to ensure hardworking young couples can turn into hard working families, just like their parents were. This with HTB2 should crystalise our [tory] recovery for years to come.

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I think something like "The mortage industry could and should have done more to make their customers aware of these changes. We've asked the FCA to urgently look at how this scheme is being implemented and ensure it is being applied fairly for hardworking families. Until they report back I have taken the tough decision to postpone these changes to June 2015."

3 posts in nearly 7 years! Surely some sort of record in any forum?

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Nice article from Mortgage Strategy magazine - mortgage stress tests due at the end of April will mean more people are declined for a mortgage.

"Lenders increasingly worried stress tests could see declines soar"

This should mean the amount people can borrow is more limited than in the past. Some lenders (e.g. Nationwide) are introducing the stress testing requirements before 26th April.

This should add a bit more pressure to house prices B)

I remain convinced this is why the start date of Help to Buy (sell) was brought forward.The lenders are also planning to ramp up BTL to cover any shortfall in targeted lending. Only important result is the amount the banks make..

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3 posts in nearly 7 years! Surely some sort of record in any forum?

I've been a persistent lurker over the years - mainly via smartphone via the News RSS feeds (not always very reliable sadly).

Makes me feel a bit sick when I think that basically F-all has changed over this time. What a waste.

Anyway, great website - good to see HonestEA is still on here - http://www.housepricecrash.co.uk/forum/index.php?showtopic=193387&st=0

Here's hoping for the mega-crash and a lot of negative political fallout so Osborne, Dave and co can get a good hiding. Long live Vince, Merryn and Max! :ph34r:

(BTW - Why does this thing autocorrect "G i d e o n" to "Osborne" in the Preview Post?!)

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More from Nationwide here:

Do you think the MMR will have a negative effect on mortgage lending in 2014?

It’s possible that some clients who would qualify for a mortgage now, may struggle after the implementation of MMR, but the mortgage market will grow again in 2014. We may however see a change in the usual seasonality with a slight slowdown in lending through the implementation.

Sounds like house price problems to me :lol:

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And there's more (still surprised main stream media not picking up on this):

"Lenders expect significantly more borrowers to be declined a mortgage over the next three months as tighter rules are imposed on the sector."

BoE: Lenders expecting surge in declines in coming months

Under dual APR proposal, mortgages where borrowers are tied in for under five years will need to include an APR for what they are paying during the lock in period and a worst case scenario showing the most they could have been charged on a lender’s SVR over the previous 20 years.

Treasury pledges to minimise disruption caused by EU mortgage directive

This should help get the HPC ball rolling :rolleyes:

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I was in with a mortgage consultant for a major lender and he voiced that new customers did not yet understand just how much impact new regulations kicking in next week can have on the amount some of them will be able to borrow.

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I was in with a mortgage consultant for a major lender and he voiced that new customers did not yet understand just how much impact new regulations kicking in next week can have on the amount some of them will be able to borrow.

And yet...

http://www.theguardian.com/money/blog/2014/apr/12/fca-mortgage-test-problem

"The new affordability tests will at least force lenders to carry out checks on income and spending.

But when the "clampdown" means that someone on £100,000 a year can take out a £700,000 mortgage and still meet what are supposed to be tough new affordability checks, then it's clear that brokers will be able to game the system."

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And yet...

http://www.theguardian.com/money/blog/2014/apr/12/fca-mortgage-test-problem

"The new affordability tests will at least force lenders to carry out checks on income and spending.

But when the "clampdown" means that someone on £100,000 a year can take out a £700,000 mortgage and still meet what are supposed to be tough new affordability checks, then it's clear that brokers will be able to game the system."

The Financial Conduct Authority thinks caps on income multiples are a blunt instrument to control lending. But for "bluntness" read "simplicity" – they are an unambiguous yardstick and easily supervised, rather than the affordability tests that evidently can be manipulated.

House prices are a function of the amount that lenders are willing to advance; a blunt cap on multiples might be painful for some borrowers stretching themselves to buy an over-priced asset, but they would help everyone by deflating house prices. Similarly, regulators need to halt the drift in repayment terms from 25 to 30 years, which is a clear indicator of borrowers under stress

Wow a voice of sanity

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I was in with a mortgage consultant for a major lender and he voiced that new customers did not yet understand just how much impact new regulations kicking in next week can have on the amount some of them will be able to borrow.

I've mentioned this to at least four people interested in house prices (2 of which looking to buy) and none knew about it. The danger is that the government concocts some excuse that the industry didn't do enough to promote it so the scheme gets post-poned...

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More on this from Mortgage Strategy magazine

"MS Leader: A perfect storm is brewing in the wake of the MMR"
Speaking to brokers this week, many are deeply concerned about the perfect storm gathering across the market.

Along with tubo-charged demand from consumers and increased (and still largely uncharted) advice times, we also have the additional problem that there is still a dire lack of capacity in the conveyancing and valuation markets.

As our lead story this week shows, many brokers, convey-ancers and surveyors are concerned about what this effect could have on the market.

As our lead story this week shows, many brokers, convey-ancers and surveyors are concerned about what this effect could have on the market.

:)

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