DB Mortgages fined £840,000 by FSA
The FSA is not letting up the pressure on lenders as evidenced by another significant fine issued against a UK lender. Yet again the amount was substantial and the resultant customer redress program comprehensive and costly. However, there was one noteworthy departure from the regulators language in this decision notice; for the first time the […]
Buy to Let Equity Erosion
As long ago as December 2001 John Tiner, the then Managing Director of the FSA, referring to buy to let lending at a CML conference, said “We would not wish to see, for example, a relaxation of loan to value or rental cover without lenders first making a clear analysis of the risks.” Clearly such […]
ESG mortgages, FCA ups the stakes!
In our last blog we focused on the fact that RMBS investors are genuinely becoming more ESG focused. This is partly because of the premium that underpins a green transaction (the ‘greenium’), but also because regulators are starting to drive green issues. The latter was brought back into focus in a recent FCA ‘Dear CEO’ letter to Retail Mortgage Lenders.
The FCA has helpfully refreshed its ESG strategy, setting out its target outcomes and the actions that it will take in 2022. The tightening of FCA requirements will not only affect the manufacturers of mortgages, but the enhanced requirements will also influence future investors and investment strategies. Where ESG is concerned lenders and investors can no longer sit on the fence.
Data held by Institutions
It didn’t come as a surprise to us when we saw the recent comments by the chair of the Committee of Public Accounts where it was stated that both RBS and Lloyds Banking Group “found it difficult to provide the Treasury with appropriate and robust data on their assets”. We find that holders of assets […]
Buy now pay later products and RMBS concerns
The change in approach and increased level of anxiety regarding BNPL schemes is increasing. So why are RMBS investors becoming progressively more concerned?
1) The HM Treasury consultation on the regulation of BNPL schemes highlighted interesting growth statistics: the value of transactions from the main providers had more than tripled, 11% of consumers had used BNPL since the start of the COVID-19 pandemic (around 5 million individuals) and that an FCA review had identified the size of the market in 2020 at £2.7bn and growing rapidly, possibly doubling in 2021 alone.
An investment opportunity or millstone?
Research shows that there has been a 184% increase in the availability of buy-to-let (BTL) products over the last six months. Another recent survey revealed that 74% of mortgage intermediaries felt that BTL investments would provide attractive returns over the next five years. Their enthusiasm to ‘talk up’ this sector is understandable, with many self-certification […]
Challenger banks and financial crime controls
The FCA has recently announced the results of its review of challenger banks anti-fraud processes and controls. It undertook an extensive research programme that included over 50% of relevant firms and a sample that covered 8 million customers. The review focused on the activities of digital banks, a subset of challenger banks, who use technology led onboarding processes to promote quick and easy application procedures.
The risk of sole supplier audits
In the 2009 government review into banks corporate governance, led by Sir David Walker (former chairman of Morgan Stanley) one of the views expressed was that banks and other financial institutions should set up a separate risk committee with responsibility for oversight and advice to the board on current risk exposures and future risk strategies. […]
Unsecured Lending Portfolios
The appetite for purchasing unsecured portfolios such as car loans and personal loans is growing, relative to mortgage loans. One reason for this is simply that investors are finding it hard to source mortgage portfolios because those who were looking to sell are now ‘holders’ of assets because “they have already suffered the pain and […]
Capita v Drivers Jonas
The recent Capita -v- Drivers Jonas decision seems to have been largely missed by the mortgage trade press despite receiving some coverage in valuation related publications. However, in our view, the decision (unless overturned on appeal) has significant ramifications for lenders (residential and commercial) as well as for valuers. The claim related to a substantial […]
