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Nationwide stops broker lending on overseas army mortgages

Nationwide Building Society has stopped lending through brokers where the borrower is in the armed forces and based overseas.

The lender has moved to a new mortgage processing system which has scrapped paper-based applications, including those from borrowers with a British Forces Post Office address in the past three years.

From October 7, these applications will now only be able to be processed directly, as Nationwide’s internal system is able to process these applications, while the processing system used for broker business is not.

Other types of lending will also be affected by the move to scrap paper based applications, including clients who have had a foreign residential address in the last three years; discount market schemes, for example where the property is sold below market value; where there are more than two applicants for new borrowing and further borrowing.

A spokeswoman for Nationwide says: “The society will continue to offer mortgages direct to borrowers with a BFPO address, but will be unable to accept such mortgages via intermediaries due to a simplification of our mortgage processing system.”

British Forces Germany Mortgages principal Nigel Garside says the move is a “blow” for brokers and will make it hard to establish the level of lending advanced to the armed forces.

Mortgages for Business managing director David Whittaker, a former senior British Army officer, says: “This is part of a general tightening of ID and verification rules by the FCA, which leads to these kind of unintended consequences.”

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