After a Mortgage Solutions question at the FCA’s annual public meeting, CEO Martin Wheatley dismissed lender product and underwriting clamp downs as ‘teething problems’ adding unintended consequences of the new lending rules are being ironed out.
Mortgage advisers rushed to disagree, outlining a rash of illogical lender mortgage decisions.
One broker said after a valuation delay the lender requested an updated pay slip. In the interim the client had a pay rise which the lender ignored, but due to the increased pension payments, the lender cut the mortgage offer by five pounds.
Elsewhere, a lender spotted a regular payment in an applicant’s account for £10 a month to pay a neighbouring child for walking the dog. After the lender’s insistence, the sum was included as a household bill and the mortgage offer was reduced.
Another adviser said: “I had a case of a client on £130,000 per annum and the lender [wanted] a disposable income of over £2,000 per month, which is more than the average wage earner in the UK earns net of tax and before their bills. He was doing a pound for pound remortgage with no debt problems, so [had already] evidenced the fact he lives off a lower disposable income.”
Arron from Temple Capital said: “Most lenders need to revisit their criteria and perhaps gather some brokers together to ensure their criteria is more realistic. The FCA is right to be concerned that unintended consequences have stemmed from isolated compliance departments not being able to see reality.”
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