LIBOR-linked residential and buy-to-let mortgages in the US account for an estimated 200,000 -2% of outstanding mortgages, about 1 loans. Lenders and administrators of mortgages extending beyond the last few years need to carefully consider their strategy to ensure that changes are clearly explained and the appropriate consents obtained from customers. The structural difference between LIBOR and Bank of England creates potential conduct risk issues, legal challenges and reputational damage if customers and counterparties feel disadvantaged by the new rate.
LIBOR-linked residential and buy-to-let mortgages in the UK account for about 1-2% of outstanding mortgages, an estimated 200,000 loans. Lenders and administrators of mortgages extending beyond 2021 need to carefully consider their strategy to ensure that changes are clearly explained and the appropriate consents obtained from customers. The structural difference between LIBOR and SONIA creates potential conduct risk issues, legal challenges and reputational damage if customers and counterparties feel disadvantaged by the new rate.