GE no cap above 95% for Investments

[Rolf Latham]

Initially, this lower LVR change was flowing through mainly mortgage managers, but it looks like its going through at least some lenders with DUA

STG being one

From Monday 15th April, investment purchases will be limited to a max LVR of 95% INCLUDING LMI. Applications in the pipeline prior to that date will be honoured. Any lodged on or after the 15th will be subject to the new policy being brought in by Genworth.

Id expect CBA and AMP et al to follow

ta
rolf

 

[Aaron_C]

Interesting. I just heard from my ING BDM the other day that Genworth did the same to their DUA recently. Oh well.

 

[tobe]

Rams being another

 

[Peter_Tersteeg]

For most investors, this isn't going to be quite as bad as it sounds. If they had applied it across the board, then the first home buyers would be in trouble.

Chances are that'll still happen though.

 

[tobe]

interestingly they specified no cap on 95 regardless of the purpose of the loan. For genworth its the purpose of the security which gives the restrictions, rather than the purpose of the loan.

 

[Marty McDonald]

yes beacuse YOU need a roof over your head more than your tennants

 

[Rolf Latham]

CBA as well

The maximum LVR (including capitalised LMI/LDP) for any new Home/Investment Loan or Top Up where security is fully or partially held over an investment property will be 95%. This also includes loans involving security guarantors who are providing an investment property as security.

ta
rolf

 

[Marty McDonald]

Genworth!!...they load LMI premiums by 10% for IP's (and another 10% for the poor old self employed) then they make their lenders capp at max base LVR 92%- 93% LVR

What does it mean / what are they seeing?

 

[Rolf Latham]

What does it mean / what are they seeing?

managing their risk and profit as you would expect

ta
rolf

 

[Aaron_C]

managing their risk and profit as you would expect

Making all of us pay for their bad insured loans in Queensland last year.

 

[jonmardell]

The maximum LVR (including capitalised LMI/LDP) for any new Home/Investment Loan or Top Up where security is fully or partially held over an investment property will be 95%. This also includes loans involving security guarantors who are providing an investment property as security.

ta
rolf

this is interesting, i had lunch yesterday with one of the heads of credit with CBA and no mention about this when i was asking about upcoming policy changes.

 

[Rolf Latham]

this is interesting, i had lunch yesterday with one of the heads of credit with CBA and no mention about this when i was asking about upcoming policy changes.

thats coz its not a CBA policy change

ta
rolf

 

[Shahin_Afarin]

Genworth!!...they load LMI premiums by 10% for IP's (and another 10% for the poor old self employed) then they make their lenders capp at max base LVR 92%- 93% LVR

What does it mean / what are they seeing?

Yes I agree its pretty scary stuff and for what is worth I think its going to be a massive shift in the property industry.

Regards

Shahin

 

[Rolf Latham]

Yes I agree its pretty scary stuff and for what is worth I think its going to be a massive shift in the property industry.

Regards

Shahin

As the famous "Redhead" Lazarus' saying goes

Please explain ?

ta
rolf

 

[jonmardell]

thats coz its not a CBA policy change

ta
rolf

you would think there would be some consultation with their partners prior to rolling it out.

 

[Rolf Latham]

you would think there would be some consultation with their partners prior to rolling it out.

there is and was, but not at that sort of level.

Risk is a coporate rather than a distribution channel thing I guess.

Writing was on the wall weeks ago though, all the Mortgage Managers got wind of it, and pre announced it.

I do like your "partner" verbage - youd think that would be exactly it, a symbiotic relationship.

ta
rolf

 

[Marty McDonald]

Poor old genworth so conflicted. If some of their underwritters had their way they wouldn't write any business at all. That would be a good solid business.

 

[Rolf Latham]

Poor old genworth so conflicted. If some of their underwritters had their way they wouldn't write any business at all. That would be a good solid business.

I have always said that LMI providers arel like car insurers.............but we will only provide cover if you dont take it out of the garage

ta
rolf

 

[Jen_PFR]

Interesting. Thanks for the info Rolf. We are 95% LMI fiends, so it's useful to know such things