B RO K E R B U S I N E S S Case Clinic
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CASE ONE Client with three sets of arrears
A
customer is looking to purchase their first home but has arrears on three financial commitments. After viewing their credit report, they also discovered that one had reached default status. After contacting a number of lenders, even those that would normally lend on adverse credit were not happy with the recent nature of the adverse credit. To combat this, the debt has now been cleared by the customer’s parents. However, the customer is still finding it difficult to place their case.
BLUESTONE MORTGAGES
“We could potentially consider this case, but it would largely hinge on the nature of the commitment that fell into arrears. If it’s unsecured, it aligns with our criteria, and we’d therefore be able to move forward with the candidate’s application. However, for secured debts we would need further details as missing payments on secured debts would hinder our ability to proceed. If repayments were simply late, there’s a possibility we could move forward.”
DUDLEY BS
“This could be considered providing there is no more than one missed payment within the past 12 months and the other two arrears are more than 12 months old. Alternatively, if all three are older than 12 months, then this could be considered for below 80% loan-to-value (LTV). “Again, to fit within policy of up to 80% LTV the default must not total above £1,000 registered in 78
The Intermediary | April 2024
HARPENDEN BS
“Flexibility is at the core of our approach, especially when dealing with unique cases such as this one. The client, despite facing challenges with arrears on three financial commitments, including one reaching default status, can find assurance in our commitment to exploring viable solutions. “We have a specialised credit repair range tailored to address such scenarios. Upon initial review, it’s crucial to delve deeper into the specifics of the missed payments and defaults. “Understanding whether these commitments are secured or non-secured plays a significant role in shaping our decision-making process. Additionally, certain types of arrears, such as utility bills, may be treated differently, potentially offering further leniency. In this case, the positive aspect of the debt being cleared by the customer’s parents signals a proactive approach to resolving financial obligations. “It’s worth noting that all defaults must be satisfied to meet policy requirements prior to or at the time of application, a requirement that the client has already met, further strengthening the case for consideration. “Our willingness to accommodate would allow us to consider up to 70%.”
BUCKINGHAMSHIRE BS
“We can consider cases where applicants have had a life event or issues with management of existing debts. The society does not base its lending decision on the credit score, it looks at the credit search. With our manual approach to lending this helps us consider each case on an individual basis. “The society would need to understand what happened to cause the applicant to miss payments, how much they were for, and whether they are now back up to date. Any defaults or CCJs that are outstanding would need to be