"There are still mortgage products available, and while we might be seeing high LTV offerings drop in number, they are still out there."
Sometimes even the most venerable of institutions gets it horribly wrong.
Take, for instance, a headline this week on the BBC News website which read: ‘UK mortgage market goes into lockdown’. Even when this was changed a few hours later to, ‘UK mortgage market goes into partial lockdown’, you’d have to say that the damage was probably already done.
Imagine being someone whose special rate was coming to an end shortly, and reading that? Imagine someone sat in a telephone queue desperately wanting to speak to a lender about taking a mortgage payment holiday, and reading that? Imagine being any mortgage borrower, or prospective mortgage borrower, and reading that?
What, of course, makes it even more galling as a mortgage market stakeholder to read this type of headline on an article, which you know will garner thousands upon thousands of clicks, reads and shares, is that we are about as far from lockdown as it is possible to be.
Try telling the many thousands of lender staff who are busily working with existing borrowers in order to help them with the current situation, that they are in lockdown. Try telling the thousands of advisers who are currently contacting existing clients in order to see if they have concerns and needs, not just about their mortgage but also protection cover, and the like. Try telling those surveying firms that they’re on lockdown when they are trying to get over the challenge of not being able to conduct physical valuations in most circumstances. Try telling the conveyancers that they’re on lockdown when they are dealing with thousands of individuals who don’t know whether their housing transaction could (or indeed should) exchange/complete.
In the cold light of day, the headline does the mortgage market as a whole a huge dis-service. Even if you are talking about lockdown in the sense of product availability then you’re still far from the truth. Of course, lenders have had to look at their risk in these current times, and of course they’ve had to cut their cloth accordingly, but there are still mortgage products available, and while we might be seeing high LTV offerings drop in number, they are still out there.
This last point is an important point, not least for the fact of the work that AmTrust does with our lender clients when it comes to risk mitigation on their higher LTV loans. We’ve been working with a number in order to develop proper and effective forbearance measures – whether through the Government’s own scheme or on individual cases - so that existing borrowers can feel safe in their own properties and that they can (hopefully) ride out the current environment, which I’m sure we all want to be as short lived as possible.
However, we really need to have a level playing field in terms of the way the situation is reported, because the last thing we need is for worried (and perhaps desperate) mortgage borrowers to think the market is a closed shop and they have no other option but to default on their loans.
‘Lockdown’ can obviously mean different things to different people, but from whatever perspective you look at it, there’s clearly no truth to the suggestion that the mortgage market is in lockdown. Indeed, as mentioned, it’s fighting particularly hard to ensure that it does remain open for business and that those who do want to take a holiday, or reduce or a payment, or indeed remortgage or product transfer, or perhaps even start a mortgage journey, have the opportunity to do so.
Everyone needs support – we’re able to provide it to lenders, they in turn can deliver it to advisers, who in turn can offer it to borrowers – and I think we all have to recognise that we’re not just ‘in it together’ but actually mutually-dependent on each other to ensure the whole system and process can function. Especially at a time like this.
That’s the case now, more than ever before. And when this period has ended, I think we will all find a situation where the positive help and support that was delivered – right across the piece – was absolutely vital and instrumental in providing certainty and confidence to those who were most in need of it. That’s exactly what the mortgage market is doing every day right now – it would be nice if it was reflected in the reporting of the situation. Lockdown indeed.