Sub-prime lenders slated by CAB
May 23, 2008
Sub-prime lenders in the UK have come under fire from the Citizen’s Advice Bureau, with officials from the CAB accusing sub-prime lenders of dishing out loans to consumers that cannot afford them, and then getting aggressive when the borrower naturally falls behind with repayments. In response the Council of Mortgage Lenders has stated that the CAB is being ’simplistic’ and ’sensationalist’.
Sub-prime lenders are those that specialise in offering loans to people with poor credit, the self employed, and no proof of income. The CAB stated in a report: “Dubious advice from brokers, irresponsible lending decisions and aggressive arrears management by sub-prime lenders are driving the current increase in mortgage arrears, court action and repossessions.”
Officials from the Council of Mortgage Lenders have stated: “The vast majority of mortgage customers receive a high level of help and care from lenders of all kinds if they fall into difficulties, in accordance with the rules set out by the Financial Services Authority. The allegation that they default too quickly to court action is an assertion that is not borne out by the typical practices and processes of specialist lenders.”
However, the CAB said: “Our research suggests that many aspiring home owners have been mis-sold unsuitable and costly home loans that are doomed to fail from the start.” He added: “Many sub-prime lenders are flouting the rules on responsible lending by granting loans when it’s clear the borrower will not be able to afford to repay it from the very outset, then getting tough immediately things go wrong.”
- Many sub-prime borrowers are turning to brokers A recent report has shown that many sub-prime borrowers, such as those with poor credit and those without any proof of income, are now turning to brokers in order to get their loans and mortgages,
- Mortgage lender goes into administration According to a recent report Victoria Mortgages, which is a specialist lenders in the sub-prime sector, has had to go into administration as a result of escalating debts. The UK has seen turmoil hit the
- Most repossessions involve sub-prime lenders A recent report has shown that the majority of repossession cases in the UK involve sub-prime lenders. The research was carried out by the BBC in the light of the rocketing level of repossessions taking
- Many homeowners could face repossession over the summer Officials from the housing charity Shelter have recently expressed concerns that a high number of homeowners in the UK who are saddled with high risk sub-prime mortgage loans could be facing repossession action over the
- Gordon promises economic recovery in recent podcast The shock news that was released recently with regards to the economic growth in Britain - or rather the lack thereof - caused more unrest in the UK. It had been widely predicted that the
Comments
Got something to say?