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LVR recovery underway: QBE LMI

QBE LMI's chief executive Ian Graham claims lenders are showing "encouraging" signs on increasing their LVRs, following reductions in the wake of the global financial crisis.

Speaking in tandem with the release of the group's QBE LMI Housing Outlook yesterday, Graham told Australian Broker that "conditions are improving" when it comes to lender LVRs available in the market. "I would say that some lenders who had limits are now stepping back up, and returning to 95%."

Graham said previous reductions in LVRs had been driven by lenders' own funding decisions. "QBE has not been a constraint on the lender or borrower's ability to get a loan. We've been prepared and have continued to write business at 95% LVR, so I think whatever brokers have experienced are a result of individual lenders' decisions, which have restricted loan to values to something lower than 95%."

Graham said potential increases are good news for QBE LMI. "We are very encouraged that lenders are prepared to write to 95%, because that gives us an opportunity to do more business with them."

Graham has also ruled out any major changes to QBE LMI's policy settings, revised during the crisis period in 2008.

"Any changes we needed to make to our business, we made in 2008. As an LMI provider, we try and write our policies for the long term - we've never overreacted or underreacted - so the market can feel very confident that our policy settings, our pricing and the way we do business will continue, and they should not expect dramatic changes because the overall conditions are uniformly positive."

By Ben Abbott | 13 Oct 2010