Macquarie shields borrowers' credit scores
Macquarie appears to be the first Australian bank to introduce measures that will shield the credit scores of home borrowers who miss loan repayments during the COVID-19 health emergency.
In a memo sent to mortgage aggregators and brokers on Wednesday, Macquarie revealed that it would not be reporting missed loan repayments to credit agencies for customers affected by the crisis.
"During your client's payment pause, we won't report to credit bureaux that they are missing their obligations on their loan," the lender told brokers.
"This means their credit score will not be negatively impacted during this period."
However, Macquarie advised brokers to alert borrowers with credit products supplied by other lenders to check whether missed loan repayments were being reported to credit agencies.
The reportability of loan repayment pauses is a live issue in the United States where hundreds of lenders have notified credit agencies, such as Equifax, of borrowers requiring special relief since the coronavirus entered the country last month.
Equifax tells borrowers on its website that they can minimise the impact of missed payments on their credit scores by filing statements describing the impact the pandemic has had on their capacities to service loans.
Australia's four major banks have not yet confirmed that they will withhold information from credit agencies about borrowers on loan holidays.
Most banks and credit unions are offering pauses on loan repayments of up to six months for home and business borrowers whose incomes will be reduced by the health crisis.
Meanwhile a string of lenders yesterday inundated brokers with memos outlining changes to their operations as government lockdown measures are tightened.
Bank of Queensland, ING, FirstMac, ME reassured brokers of plans to continue servicing third party originators throughout the disruption.
However, Pepper Home Loans also notified brokers that it was withdrawing all rate and fee promotions on new mortgages from midnight on Friday.
The move is an indication that the non-bank lender has decided to put its business in a holding pattern for the duration of the lockdown measures.
"We understand this isn't the news you want to hear, but this decision allows us to support those existing mortgage customers who are most affected by the coronavirus (COVID-19) pandemic - the self-employed, customers with jobs in tourism, restaurants, cafes and the airlines (to name a few)," Pepper said in the circular.
"We will honour all loans in pipeline that have already been received under a promotion.
"An updated rate card for your systems will be provided in the coming days."