Q: All our mortgages allow up to 10% of the loan to be repaid each year without any early repayment charge applying? Should we report these as flexible mortgages?
A: If interest is calculated daily or monthly and overpayments can be made at any time without a penalty being applied, the mortgage should be reported as a flexible product.
Q: What interest rate type should we report if a mortgage has been set up with different interest rate types?
A: If the mortgage is, for example, part fixed and part discounted, you should report the interest rate type that applies to the largest portion of the overall mortgage balance. If there is a 50/50 interest rate type split you can decide which interest rate to report. However, when reporting the loan size, you should report the total loan size regardless of the interest rate split.
Q: Do you expect us to capture and record credit card arrears/mail order arrears as impaired credit?
A: The definitions for impaired credit mirror those that are used for MLAR reporting purposes. Each of the specified criteria is included as a basis of assessing a borrower's past performance in dealing with loans. Many people’s only credit exposure before applying for a mortgage may have been an unsecured loan, so it is important that unsecured lending is included.
However, we can confirm that we view ‘unsecured loans’ as excluding any form of revolving credit, eg overdrafts and credit cards.
Q: Under the categories of borrower you have categories of first time buyer and council house buyer. Both categories could apply – which should we report under?
A: The right to buy (RTB) category. Where the borrower is a first time buyer (FTB) and is also exercising their right to buy, we are more interested in knowing that the borrower is a RTB borrower rather than a FTB.
Q: In PS04/09 it states that the 'Shaded boxes represent non-compulsory data items.' Does this mean that we may choose whether to complete these fields in all cases?
A: In general the answer is yes. However, for the data in the tables for mortgages (c), the shaded boxes indicate that providing the data is not mandatory but must be reported if applicable. This applies to the following data fields:
- mortgage characteristics;
- purpose of remortgage
- County Court Judgements (CCJ) value; and
- impaired credit history of main borrowers
Q: How should we report staged releases on, for example, a self build mortgage?
A: We deal with this in the PSD data reference guide in the comments section for the 'Value of Mortgaged Property Field'. You should only report the mortgage when the final instalment has been advanced to the borrower. The loan size reported should the total loan advanced.
Q: For MLAR, business loan packages where there is no one to one correlation between the loan and a security reported as 'other secured lending', as opposed to 'regulated mortgages'. Can you please confirm if the same applies for PSD reporting i.e. should these be excluded?
A: In such circumstances we realise that it is very difficult for lenders to say whether a specific loan is secured against a specific security: so if the package includes a residential property as a security, and which would normally be part of a RMC, it is difficult for the lender to identify the precise loan that matches it.
It has therefore been agreed that in the circumstance you have identified, ie where a borrower has several loans secured against several securities but where there is no specific 1 to 1 correspondence between a specific loan and a specific security, these transactions should not be included within the PSD return.
However, where there is a 1-to-1 correspondence we would expect these loans to be included within the PSD return.
Q: Can you clarify whether we need to include all mortgages that complete from April 1 onwards or completions from new mortgages written after April 1 2005?
A: To clarify, the requirement to report from April 1 2005 applies to any mortgage that completes from April 1 onwards.
Q: My firm provides regulated mortgage contracts that are overdrafts secured on a property, with no agreed term for repayment and no regular payment plan. How should these contracts be reported in PSD returns?
A: You should report these mortgages using the interest only/unknown option in the method of repayment field, and as if they have a 1 year mortgage term.
Q: If a customer takes out a regulated mortgage contract to raise finance (which could be for any reason) secured on the property that they already own and reside in which is unencumbered (nothing secured against it), how should we report this in PSD?
A: This should be reported as a remortgage.
Q: How should we report an Open Market HomeBuy scheme, where the loan consists of both a conventional mortgage loan and an equity loan?
A: In line with past PSD guidance, we would expect firms to report the entire loan amount in the size of loan data field, but the characteristics applicable to the largest portion of the loan should be reported (in this case the conventional mortgage piece). If both portions of the loan (the equity loan and the conventional mortgage) are the same the lender can choose which element to report but the entire loan amount would still need to be reported.
"SA = the loan is a shared appreciation mortgage" should be completed in the Mortgage Characteristics data field, and "F = First time buyer" or "M = Home movers (2nd or subsequent buyers)" should be completed in the Type of borrower data field.
Q: How should we report a Social HomeBuy scheme?
A: This should be reported as a conventional mortgage and "C = council / registered social landlord tenant exercising their right to buy" should be completed in the Type of borrower data field.
Q: How should we report a New Build HomeBuy scheme?
A: This should be reported as a conventional mortgage.
Q: Our customer has an existing non-regulated mortgage taken out before 'M' day. They apply to us to refinance the loan and increase the borrowing. We will process this by internally redeeming the existing account and creating a new Regulated Mortgage Contract secured on the original legal charge. How should we report this?
A: The entire loan amount should be reported as a remortgage.
Q: How should mortgage type switches within the same firm be reported in PSD?
A: These should not be reported. The intention of PSD reporting was to try to capture new loans for house purchase and remortgages between firms, rather than the movement of existing loans within the same firm.