Up to 75% of mortgage applications denied

THE latest survey by the Professional Insurance Brokers Association has found that more than 40% of brokers reported that between two thirds and three quarters of mortgage applications were declined by lenders in the first three months of 2011.

In the last survey carried out six months ago, 55% of brokers found a similarly high level of rejections.

PIBA said the slight improvement gave “no cause for optimism”.

The survey found that the main reason mortgage applications were refused by lenders was job security. Either the applicant had not been in current employment for sufficient time or their employment was a fixed contract rather than permanent. Another reason applicants were given for rejection was that they did not qualify for the amount required.

Rachel Doyle, director of PIBA mortgage services, said the absence of a normal functioning banking system was continuing to stymie any underlying demand: “Brokers are reporting that this, along with the related concerns about the IMF- ECB bailout, is depressing consumer sentiment.”

Almost 69% of mortgage brokers said the situation was either worse or much worse in the first three months of this year. Only 6% of brokers noted an improvement.