Two thirds of existing investor loans wouldn't get approved today?

Discussion in 'Loans & Mortgage Brokers' started by roots73, 11th Jul, 2017.

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  1. roots73

    roots73 Well-Known Member

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    Westpac dumps mortgage products in major review of underwriting and lender risk

    This paragraph caught my eye, not sure if they are referring to only Westpac loans but, either way, an interestingly high number...

    One-in-10 borrowers would fail underwriting standards for owner occupation and two-thirds for investment purposes if recent borrowing criteria was applied to new loans, according to analysis by Digital Finance Analytics (DFA).

    The majority of failing loans would be for between $500,000 to $700,000, predominantly in NSW and Victoria.
     
    roots73, 11th Jul, 2017
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  2. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    what it could be construed as is


    According to APRA and other standards implementors and regulators, the implication is that just about all lenders deceived their stakeholders, borrowers and had Zero idea as to how to manage risk.

    I cant see that being true per se

    ta
    rolf
     
    Rolf Latham, 11th Jul, 2017
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  3. DowntownBlock

    DowntownBlock Well-Known Member

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    Might be half, who knows?

    For banks, at this stage of the cycle, the biggest risk is political.

    Regardless of what the actual number is, perception is reality for banks and APRA at the moment . . .
     
    DowntownBlock, 11th Jul, 2017
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  4. roots73

    roots73 Well-Known Member

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    Indeed...
    With all this external pressure (perceived and real), will this new lending environment remain the standard (or should we rather say, this return to previous standards)...?
    Only time will tell I guess...
     
    roots73, 11th Jul, 2017
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  5. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Basel IV the new world order for stability in banking would suggest these things arent going to go back to the way they once were.

    Standardised risk approaches kill innovation in return for "steady as she goes".

    ta
    rolf
     
    Rolf Latham, 11th Jul, 2017
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  6. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    I can't see it changing.

    It's becoming the new norm. If anything - borrowing capacity calculators will continue to become tighter IMO.

    Cheers

    Jamie
     
    Jamie Moore, 11th Jul, 2017
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  7. DowntownBlock

    DowntownBlock Well-Known Member

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    DowntownBlock, 11th Jul, 2017
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  8. Tom Simpson

    Tom Simpson Well-Known Member

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    I'd believe it.

    Similar to the old lo docs...if you assessed them by almost ANY standard most of them would probably fail.
     
    Tom Simpson, 11th Jul, 2017
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