Shrinking equity cushion
In a buoyant property market banks may have taken commercial decisions to property lending that were appropriate in a market where property prices kept rising and the equity cushion would continue to grow. In a shrinking market however, banks are more exposed to risks, particularly around title, such as onerous covenants that may have an impact on the use of the mortgaged land and properties and therefore their security. A number of lenders are reviewing their mortgage books in order to identify potentially risky assets.
A Known Risk policy from First Title can be used to insure against a host of common title risks and will protect both the owner of a property, their mortgagee and any successors in title and lessees. Some of our risks are available through our online facility, please click the link to register.