Daily Archives: January 4, 2015

Why are banks really rejecting wealthy borrowers?

Simon and Susan Pinnington have been HSBC customers for more than 20 years. When they decided to sell their £840,000 home and move to a new property, they asked to transfer, or “port”, their small £189,000 mortgage.

This should have been a smooth process.

They were buying a five-bedroom detached house in Maidenhead for £900,000, but did not want to borrow any extra money as they could pay the additional £60,000 from their savings.

Neither did they want to extend the term of the loan, which had less than nine years remaining.

The couple, who own their own optician franchise, went through a detailed financial review with one of HSBC’s own mortgage advisers. She determined that the transfer was affordable and submitted the application to the underwriting team for approval.

That was when things started to go wrong. To their surprise, the underwriter declined the application, saying the loan was not affordable.

When the Pinningtons queried this, they received an email saying: “I have spoken with the underwriter who assessed your case. Unfortunately, the decline decision still stands.

“Because you are moving to a new house we have to assess the mortgage application under current guidelines and we need to demonstrate that the mortgage is affordable to you now and if interest rates were to rise.”

This statement is not strictly correct.

The regulator did introduce tough requirements in April but put in place “transitional arrangements” so that existing borrowers who don’t meet the new tests are not disadvantaged.

These allow lenders to approve changes to existing mortgages as long as the borrower does not want to borrow more or extend the term of the loan.

More from Telegraph UK website. Click here.

Former Hedge Fund Manager Arrested After Squatting In Million Dollar Home

The economic “recovery” has been harsh, especially for the former hedge fund manager of Paron Capital Management, James Crombie and his family of 4 including. So, as a result Crombie decided to continue living the good life: he did so by squatting in someone else’s Maryland house listed in May 2014 for over $1 million.

Crombie’s fall from grace had been quick and violent as described by ABC:

Crombie, 47, is the former head of hedge fund Paron Capital Management who was ordered to pay $35.6 million to his former partners after he allegedly lured them with false promises and falsified documents, the Delaware Supreme Court upheld in March 2013. Crombie had appealed a lower court’s ruling claiming it was unsupported by the record and the award of damages and attorneys’ fees were an abuse of judicial discretion.

Read on.