In an attempt to overcome the barriers acting against older mortgage applicants, LiveMore Capital establishes a social bond framework.
LiveMore Capital, the mortgage provider for the 50 to 90-year-old demographic, has set up a social bond framework to support the issuance of social bonds.
It’s no secret that those operating within the financial industry are doing so in full consideration of ESG. Known as environment, social and governance, right at the centre of this term are where LiveMore Capital’s latest operations are concerned.
Its newfound social bond framework seeks to issue social bonds. In a very similar way to how green bonds finance green projects, social bonds aim to finance a particular social project.
However, the purpose of social bonds must be measurable and predefined. For instance, if someone uses social bonds to fund the creation of new jobs, they need to determine the end result beforehand. It’s this latter point that sets social bonds apart from generic securities.
Here, LiveMore Capital is bringing together investment and private capital to readdress how older generations are able to access mortgages in the face of credit assessment limitations.
LiveMore and limitations to lending
LiveMore’s mortgages perform a vital social role in providing solutions to borrowers who are unable to qualify for a traditional mortgage due to their age.
The current mortgage and lending process is working against applicants between the ages of 50 and 90, due to its sole assessment of salaries, rather than considering varied income sources like pensions.
In this way, this demographic lacks sufficient access to mortgages and wider borrowing services, which may result in them forsaking their other assets such as property.
It is a need to overcome the barriers imposed by this limited assessment process that drove LiveMore to launch its latest initiative.
The social bond framework has been developed in conjunction with the rules of the International Capital Market Association (ICMA), which promotes the sustainable development of international capital and securities markets.
The framework is further supported by the second-party opinion of ISS Corporate Solutions Limited, which has certified LiveMore’s mortgage portfolio as a socially sustainable investment.
LiveMore has since confirmed that it is actively exploring further opportunities under the ICMA green bond and ICMA sustainability bond principles, with a view to launching products which help finance progress towards environmental and social sustainability in the near future.
Mortgages that mean more
In pursuit of becoming a carbon net-zero firm, LiveMore has backed the launch of its social bond framework with a partnership with Trillion Trees.
The lender’s work with the global reforestation project will see a tree planted for every mortgage it sells, thus offsetting its carbon emissions in the process.
LiveMore’s contribution to Trillion Trees to date is equivalent to 1,395 tons of CO2 removal or four million miles driven.
“Most mortgages don’t have a social angle but our products do,” comments Alexandra Hansmeyer, LiveMore’s head of legal.
“Social bonds are for borrowers whom other lenders do not want to lend to because they consider them too old, which is wrong on so many levels.”
“We believe our social bond framework and future plans to expand on this with the likes of green mortgages are positive attributes for a modern, ethical mortgage lender,” continues Hansmeyer. “Our partnership with Trillion Trees is hugely important to us along with our commitment to sustainability and our carbon net-zero targets.”