Risky mortgage portfolios
We have heard commentators starting to describe some mortgage portfolios as ‘toxic’. While that may sound a bit harsh, we can understand how they may have reached that conclusion. There is no doubt that many borrowers are struggling to service their debt and there is also no doubt that certain categories of product and/or criteria […]
ESG comes of age
For too long there has been a sceptical mistrust in the integrity of some ESG labelled securities. It is not surprising that the term ‘Greenwashing’ has become a word in everyday vocabulary. That term seems to have become more acceptable rather than what is really being called out; “exaggerated, misleading or unsubstantiated sustainability-related claims about […]
UK Finance arrears update – do you really know what you are holding/buying?
UK Finance has just issued its arrears data for Q1 of 2022. The press release highlights some of the positive aspects of the data, for example, the headline “The total number of customers in arrears with their mortgages continued to fall in the first quarter of 2022”. It also highlights the reduction in total arrears […]
Supporting existing customers
In its parting shot of 2022, the FCA issued a consultation in response to the rising cost of living, outlining draft guidance for firms to support customers in financial difficulty. The urgency of the subject matter was obvious as firms were given less than two weeks to respond. Deteriorating market conditions have been further highlighted […]
Affordability stress tests – should funders be concerned?
While the Financial Policy Committee decision to drop lender affordability stress tests was expected, it is difficult to find articles that support the timing of the decision. When the restrictions were introduced in 2014, the intention was to prevent general loosening of credit assessments with the worry that reckless lending could cause an economic downturn […]
PRA seeks proactivity in managing credit risk
The PRA is telling firms to prepare for a prolonged period of stress. While the recent FCA focus has been the increasing risk of mortgage defaults and the resultant risk to consumer harm and market stability, the PRA is tackling the issue from a slightly different angle. In a recent Dear CEO letter to Deposit […]
Equity release concerns return
The Times recently ran an article that highlighted issues with equity release/lifetime mortgages. These mortgages have been plagued by negative connotations and even litigation ever since the first home income plans appeared in the 1980’s. All subsequent variations of the original schemes have suffered their own issues. However, what made this article more worrying was […]
FCA Consumer Duty focus ramps up
The FCA has issued eight of the sixteen sector-by-sector guidance letters for Consumer Duty. The other eight sectors will receive theirs shortly. We have active clients in fifteen of the sixteen individual sectors, so we know Consumer Duty is exercising their minds. With an implementation deadline due in July 2023, the FCA is being proactive […]
Arrears contingency planning
The markets were not surprised when the Bank of England Monetary Policy Committee (MPC) recently voted to increase the bank base rate. The only surprise was that the increase was limited to 0.25%, lifting the rate to 0.50%. It is now known that members were split 5-4 with those in the minority arguing for a […]
Recovery Loan Scheme
While the Government’s Bounce Back Loan Scheme (‘BBLS’) and Coronavirus Business Interruption Loan Scheme (‘CBILS’) may have closed, they have been replaced by another loan scheme, also designed to provide financial support to UK businesses, named the Recovery Loan Scheme (‘RLS’). Like the previous schemes, the RLS is initially available through several lenders accredited by […]
