Powered by MOMENTUM MEDIA
subscribe to our newsletter

Latitude reverts to pre-COVID lending criteria

The non-bank lender has announced that it is restoring its lending criteria to pre-COVID-19 settings to reflect improving economic conditions amid the COVID-19 pandemic.

Latitude has made changes to its risk and underwriting policies after recently lowering its credit risk and tightening its serviceability criteria for new borrowings amid the economic ramifications of the coronavirus pandemic.

Explaining the reason for the latest changes, the lender said they “reflect the improving economic environment as Australia comes out of the challenges of COVID-19”, adding that it will maintain proof of income practices across its asset and personal loan products.

The lender has announced the following changes to its risk and underwriting policies:

  • Casual, seasonal, temporary, and contractor employment types will now be accepted, with all industries included;
  • It has removed the self-employment underwriting referral rule;
  • It has removed the $100 surplus capacity buffer;
  • It has re-introduced D grade applications; and
  • It has made new higher lending limits available for borrowers.

The changes were effective from 7 October, with Latitude explaining that there will be no impact to applications received prior to this date.

Advertisement
Advertisement

All applications received prior to this date will be accepted, and decisions will be made according to the lender’s current credit policies, it said.

“Our income assessment policies have not changed, which ensure that we continue to be a responsible lender and protect your customers, while supporting you to get your customers the loans they need today,” the lender said.

It noted that these risk policy changes are implemented until further notice.

When COVID-19 reached Australian shores and resulted in economic tumult, Latitude joined other lenders in reducing its credit risk appetite to ensure it “continues to be a responsible lender”.

Pepper Money withdrew rate and fee promotions on new loans, which it said would enable it to better support existing mortgage customers impacted by COVID-19, particularly those in sectors most affected by the pandemic.

PROMOTED CONTENT


However, the lender recently wound back measures introduced at the height of the COVID-19 crisis, and resumed accepting 100 per cent of casual and overtime income, commissions and bonus income, and cash out requests for “verified purposes”.

Other lenders who revised their risk appetite during the COVID-19 crisis included LaTrobe Financial, ME Bank and Bluestone.

The latest changes by Latitude have followed those by Westpac, which recently announced a number of changes to its credit policy, including the rollback of non-base income shading restrictions that were introduced in response to the COVID-19 crisis.

The bank said it would resume accepting 80 per cent of most non-base income (up from 60 per cent) in its serviceability assessments.

[Related: Auswide rolls out new investor loan, updates policy]

Latitude reverts to pre-COVID lending criteria
Latitude reverts to pre-COVID lending criteria
mortgagebusiness

Are you a new-to-industry broker in the process of growing your business? Then there’s some great news: The Adviser’s New Broker Academy is back in 2021 and will provide you with essential insights into cutting-edge tools, strategies and processes to fast-track to success. Don’t miss your chance to attend. To secure your FREE place, visit newbroker.com.au now!

Malavika Santhebennur

Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.

Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.

Latest News

OPINION: Debt-to-income ratio limits: do they help, or hinder? With the average property in Australian capital cities now over $700,000, l...

The Treasurer has met with regulators to discuss the housing market and consider whether “carefully targeted and timely adjustments” ...

The platform has become the first private sector exchange accredited under the ​​Trusted Digital Identity Framework. ...

Join Australia's most informed brokers

Do you know which lenders are providing brokers and their customers with the best service?

Use this monthly data to make informed decisions about which lenders to use. Simply contribute to the survey and we'll send you the results directly to your inbox - completely free!

How long do you think it should take to discharge a mortgage?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.