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‘Big banks need to return public bailout favour with high LTVs’ – Star Letter 12/06/2020

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  • 12/06/2020
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‘Big banks need to return public bailout favour with high LTVs’ – Star Letter 12/06/2020
Each week Mortgage Solutions and its sister title Specialist Lending Solutions select the top comments from our readers in our Star Letter section.

 

The first was from George Williamson, in response to the article: We cannot turn on lenders overwhelmed with 90 per cent LTV business – Montlake 

Williamson said: “The big boys need to come back to market, especially RBSNatWestLloyds and Halifax who have a moral duty to re-enter the market at 90 per cent loan to value (LTV). The UK public bailed them out last time, so now its time to return the favour. 

We are in a market that is no busier than it should be at this time, and if mortgage choice is reduced by LTV, then the lenders will start driving down house prices and force a longer and deeper recession  not a great outcome. 

He added: “As for the Bank of EnglandPrudential Regulation Authority and the Financial Conduct Authority  using LTV as the major indicator of risk harks back to caveman days, we now have fire, the wheel and our regulators need to have learned this lesson from the credit crunch. 

Using LTV bankrupted many profitable businesses for the sole reason that the LTV covenants had been breached and this was used to assess the capital adequacy of lenders. 

 

No mortgage applicant is risk-free

Another article which gained a response was: Property sales rebound to near pre-Covid levels – Zoopla 

Sox said: “Yes, and most of these are yet to have their mortgages agreed. What I’m seeing from some lenders this week is quite ridiculous.  

“Let’s face it, as far as risk assessment goes, no applicant is a sure thing in this environment. Standby to have cases decline for no apparent reason.

 

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