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Bath BS intent on more high LTV lending after Genworth deal

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  • 28/02/2014
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Mutual Bath Building Society has signed a mortgage insurance deal with Genworth allowing it to lend high Loan to Value mortgages for the first time.

Bath’s chief executive Dick Jenkins said the moderate level of lending it aimed to do doesn’t merit the bureaucracy and the overheads of the Help to Buy 2 scheme.

He added: “It is much simpler to work with Genworth than a government scheme. Our experience has been that, as with all government schemes, they are over-engineered.”

He added Help to Buy 2 places particular constraints on the cases they will and will not accept, and the credit risk must be squeaky clean but that the building society wants more flexibility over who it intends to lend to and the product itself.

“The government scheme was marginally cheaper at face value, but when you weigh up all the bureaucracy, Genworth was the better choice,” he added.

Bath already lends up to 100% LTV with its Parental Assistance Mortgage, but according to its website, most of its lending is done at under 80% LTV.

According to its results, Bath lent £32m to December 2012, 40% up on the previous year.

This is the first time the Society has brought high LTV products to market without a parental guarantor. It intends to issue mortgage products which require smaller deposits with its proposition aimed predominantly but not exclusively at first-time buyers in the region.

Genworth’s mortgage insurance product allows lenders to access bespoke arrangements which they can tailor to their own needs rather than rely on a ‘one size fits all’ approach which is offered through the taxpayer-funded guarantee.

Simon Crone, vice president, commercial mortgage insurance Europe at Genworth, said: “Having Bath Building Society as a new Genworth client is a real coup for the business. There are clearly many differences between our products and Help to Buy and by utilising our products Bath Building Society is sending a clear message that the private market is open for business and can deliver stability and certainty for lenders, not just over the next few years but far beyond the anticipated lifespan of HTB2.”

Dick Jenkins, chief executive at Bath Building Society, said: “Genworth’s clear and transparent proposition, its experience in this market, financial strength and the level of expertise that will be available to us were particularly persuasive factors in Bath Building Society opting to work with the team there. We believe we now have the right partnership and product to ensure we continue to offer mortgage options to those borrowers in the high LTV bracket.”

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