Packager Em financial managing director Roger Morris says he was unsurprised by DB Mortgages’ latest announcement that it will not honour previously accepted DIPs following its recent product changes.
Morris says: “It’s no surprise to us as that’s clearly what they have to do to stay in the marketplace. I think their brand identity means a lot to them so they don’t want to risk having to pull out completely of the market. I think they’ve been told to keep criteria sensible and play it safe for the next six months.”
He adds that the announcement by DB Mortgages caused them to do a lot of re-work on its cases. “Any cases we’ve either reprocessed it or given it to other lenders. These decisions just aren’t good for us.”
A spokeswoman for Deutsche Bank says that it made the decision as it wants to make sure that its products are affordable and transparent for borrowers.
She says that the lender is not trying to reduce business but admits that many packagers will decide to place business with other lenders following this announcement.
The lender sent an email to packagers yesterday stating that it has introduced a higher credit score pass threshold for all new business as well as capping maximum sub-prime loan to values at 75 per cent.
The changes mean that there is a high chance many applications will not pass the strict credit scoring system that DB Mortgages has put in place.
The changes to its product range means that all previously accepted DIPs now require re-submission. But the lender says that all future DIPs will be valid for 30 days and offers for 60 days.