Banks will rarely use the 15% exceptions

4

44brendan

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. Forget the 15% allowable exceptions no front line lender or underwriter will want to raise their head above the parapet for any case other than the very odd exception. There is no way that banks will go anywhere near this 15% limit.
 
This is very interesting.

The exceptions make the new restrictions acceptable. If the Banks are scared to use them, then it could be a disaster.
 
I have worked in a number of banks to date (all found me out eventually). The core document that dictates lending is the Credit Policy of the Bank which generates lending procedures and controls. Exceptions to policy are regarded as higher risk loans and generally require approval at a higher level than standard and would mostly be avoided unless there was a very good rationale to process them.
The CB should be well aware of this and while they have included them in their edict they will surely know the bank practise in dealing with exceptions. You will find that all banks are now operating under the new rules and the only exceptions that will currently be looked at are those where the loan approval has already issued.
It would be useful to know whether any AAM contributor is currently looking for a mortgage under existing guidelines and have been advised that their loan will still be processed under the old guidelines!
 
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