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DB raises the bar for loan credit scoring

DB Mortgages has introduced a higher credit score threshold for all new business and has capped maximum sub-prime loan to values at 75 per cent.

The changes mean there is a high chance that many applications will not pass the new strict credit-scoring system.

The changes to the product range mean that all previously accepted decisions in principle now require submitting again but the firm says that all future Dips will be valid for 30 days and offers will be valid for 60 days.

DB Mortgages says that all offered business will not be affected.

The firm has capped maximum LTV for self-cert at
75 per cent across all products. Maximum LTV for full status near prime+, near prime and super light is now at 90 per cent.

Maximum loan size for all products is £250,000.

A spokeswoman for Deut­sche Bank says it wants to make sure its products are affordable and transparent for borrowers.
She says the lender is not trying to reduce business but admits that many packagers will decide to place business with other lenders following these changes.

Packager Em financial managing director Roger Morris says: “It is no surprise to us as that is clearly what they have to do to stay in the marketplace.

“I think that their brand identity means a lot to them so they do not want to risk having to pull out completely of the market. I think that they have been told to keep criteria sensible and to play it safe for the next
six months.”

He says the changes have brought a lot of work. “We have either reprocessed cases or given it to other lenders. These decisions are just not good for us.”

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