ICS Reduces Borrower Multiple to 2.5 Times

They have very high rates anyway, so I am not sure that it's too significant.
The increase in the rates was a bigger issue.

I would love to know what is really going on here. Why did they not just say "We are closed to new business."

Would it have implications for existing customers who want to top-up their mortgage?

By the way, I could fully understand a lender putting a limit of 2 1/2 times income on mortgage applications as a credit mechanism, but the rates should be much lower for the lower risk. But ICS has a lower limit and higher rates. Makes no sense.

Brendan
 
It reads like “we’re closed for new business but we don’t want to say that we’re closed for new business”.

If the alternative lenders are funded by sources such as hedge funds and family offices, they must be coming under pressure.

Maybe there’s some angle to selling the book/business whilst still being technically open for business?
 
Brendan Burgess said:
Why did they not just say "We are closed to new business."
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The other restrictions combined with the 2.5x loan-to-income limit certainly make it sound like that. From The Irish Times (and also in the above Indo article):
It also introduced loan-to-value restrictions of 80 per cent and 70 per cent for first-time buyers and second-time buyers respectively. Going forward, a minimum income of €50,000 is required for a single person, or €100,000 for a couple.
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The minimum loan size has been increased to €150,000, while the maximum loan has been reduced to €500,000. There will be no equity release in switcher applications, and no variable pay amounts allowable for PAYE applicants.
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ICS has raised its variable rate by 1.25%

www.rte.ie

ICS Mortgages announces increases to interest rates

ICS Mortgages is set to increase its variable interest rates across its owner occupier and buy to let products, effective from October 1, 2022.
www.rte.ie www.rte.ie

ICS said owner occupier variable rates will increase across all Loan to Value (LTV) bands by 1.25%. For example, the rate on an owner occupier variable rate mortgage with an LTV of less than 70% will increase from 2.45% to 3.7%.
 
There must be some angle to this whereby if you’re actually closed to new business, some bad technical or regulatory stuff happens, so the workaround is to make yourself effectively closed for new business.

It’s also (another) salutary lesson around what can happen to lenders who aren’t funded by deposits.

The net effect? Less competition and bad outcomes for the consumer. :(
 
Gordon Gekko said:
It’s also (another) salutary lesson around what can happen to lenders who aren’t funded by deposits.
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It can work the other way too. You can enter the market more easily as well as exit it.

There's clearly an interesting reason for why ICS are doing what they're doing. Would be good if a business journalist could chase it up.
 
Didn't Dilosk get a €500m commitment to buy future RMBS from BOI a few months back as part of the them buying the KBC mortgages. I think the competition authority made it condition of sale i.e. to support non bank lenders. Been a while since I looked at securitisation markets but this smacks of them losing access at levels that they need to remain competitive. If so, there is no coming back.......
 
in the process of moving from them, you can’t get through to customer service to talk to a human, the focus has been on new business and not providing customer support to existing customers who want to talk to a mortgage advisor to crunch numbers and discuss options. That has been my experience - a few years ago they were much more professional to existing business who transferred from BOI group , but with the expansion they just have not put the appropriate customer service systems in place. It is shocking to be treated so badly. I have been on to them since April of this year - they wouldn’t give me a fixed rate and then they said they would “on this occasion “ when I complained , I asked them in July to move me to the lower variable published rate and they didn’t. Just got a letter yesterday increasing the variable rate by 1.25% to 4.475% - like hello who pays that rate? With less than 50% loan to value. Have AIB approval for fixed rate so switching is underway - not putting up with this nonsense and the shambles of a customer service.
 
The Irish Times has an article on it today:

ICS’s business model is based on borrowing initially from big investment banks to lend to customers, before refinancing pools of loans on the international bond markets through the sale of so-called residential mortgage-backed securities (RMBS).

There has been strong speculation in the market that ICS’s recent move to pull back sharply on new lending was down to it maxing out its banking credit facilities at a time when the RMBS market, while not entirely closed, isn’t exactly inviting.

However, sources say that ICS has about €600 million of lending capacity left over from a €900 million facility – its largest ever – agreed with three international banks a number of months ago. .
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