Mortgages: Bankers told they are too risky for a loan

[Legal Beagles]

Do you want a mortgage from a bank? Whatever you do, don't work there. It emerged this week that a job in a bank, once seen as a sign of financial probity, is regarded by banks themselves as a risk factor when it comes to assessing suitability for a mortgage.
Lenders are also refusing loans to people who work in the property industry - from estate agents to removal workers - amid fears of further job losses in the housing market slump.
According to mortgage brokers, Royal Bank of Scotland is rejecting applications for loans from anyone who derives more than 30% of their income from property. When an application for a mortgage from the manager of a lettings agency was turned down, Ray Boulger of John Charcol says he quizzed RBS, and was told the criteria would apply to anyone connected to the property industry, such as conveyancing solicitors, removal workers - and even mortgage brokers.
Meanwhile, Woolwich, part of the Barclays group, is understood to be turning down applications from workers across the financial services sector who rely on bonuses for a significant part of their income.
Melanie Bien of broker Savills Private Finance says: "It's basic salary only. We had a client who works for one of the big investment banks, who earns £140,000 per year in basic salary plus a bonus of £1.3m a year for the past three years. But Woolwich would only take the basic into account." Lenders are also checking every detail of an applicant's financial history - and if there are any blemishes, no matter how small, individuals are rejected.
Bien says: "We had one case where the client had exceeded his overdraft limit by £30 (it was only £500) and this was registered as an arrear on his credit file, which meant his mortgage application was rejected.
"He has had to get his bank to change his file before the application could be resubmitted. The problem has been exacerbated by the fact that in the past, the broker could have reasoned with the lender and explained the situation. Now it is all automated. Even though he hasn't missed any payments as such, as far as the lender was concerned he was a bad payer."

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[righty]

Re: Mortgages: Bankers told they are too risky for a loan

I like it. Hung by their own petard......... perhaps now they won't be so quick to default customers & ruin their credit status. Perhaps 1st they'll listen to the often valid reasons as to why someone goes overdrawn or fails to pay on time