The adjustments will come into force on 20 August and relate to non-conforming products and its light buy-to-let deal. Changes include the withdrawal of the self-cert option, first-time buyers and second charges will no longer be accepted, and the lender will also no longer consider clients with missed payments in the last three months for all non-conforming deals.
Added to this, db’s extra heavy range will now have a maximum CCJ limit of £20,000 and arrears will no longer be unlimited, but restricted to five in the last 12 months with none in the last three.
Mark Bergin, director of sales and marketing at db mortgages, said: “Some of these changes are temporary. Funding costs have gone up and we needed to re-price and make changes. When we looked at the risk profile and investor demand, it came together to drive the changes.
“We don’t regard ourselves as having exited the non-conforming market in any way. None of us operate in a vacuum and almost all lenders have put their prices up, while some have gone further than us in closing their doors to the market. The risk and return is out of balance with the competition in the market.”
James Cotton, mortgage specialist at London & Country, said: “We are going to have a period where lenders everywhere will have to assess their risk and exposure and that will mean some will make changes to criteria and rates. It will particularly affect those active in securitisation and the structured finance market. People have got in a bit of a frenzy about the changes, but I’d rather lenders made them than not, and carry on regardless.”
