The Murky Side Of Sub-Prime
Jan 22 at 12:12pm by admin
A recent investigation into mortgage advisors has revealed widespread mis-selling.
The results from a BBC investigation show that some mortgage advisors have encouraged borrowers to exaggerate their income to secure mortgage deals which they have little hope in meeting repayments.
This kind of mis-selling is rife within the self-cert and sub-prime market.
The problem wlth self-cert is that a client can be encouraged to go down this route and declare any income which they like. As a result, low income borrowers have been able to secure mortgages which are doomed from the start.
For a mortgage advisor, it is easier to get the deal passed so this is what they use it for. The system has been abused.
Personal Finance Claims have helped clients, receive totally unexpected financial compensation as a result of invalid, unenforceable or fundamentally flawed consumer credit agreements. These include mortgage, secured loan and motor finance contracts.
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Technorati Tags: mortgage, self-cert, sub-prime, low income
New Concerns For Lenders
Jan 18 at 5:05pm by admin
Phil Catchpole is an associate at national law firm Shoosmiths, advising on consumer credit, mortgages and financial service regulation gives writes about the Consumer Credit Act 2006
In summary he writes about the major concerns for mortgage lenders which arise from the reforms created by the Consumer Credit Act 2006. The major concern being:
Unfair relationships - a borrower is able to challenge a credit agreement on the grounds that the relationship between the borrower and the lender is unfair. The new test will have a retrospective effect and will apply to any existing agreement. If unfair relationship/s have been found in securitisations (RMBS), those loans may need to be removed from the pools of assets or substituted by originators.
Check out the full article here…
Technorati Tags: mortgages, financial service, Consumer Credit, borrower, credit agreement
Sub-prime market is in crisis
Jan 7 at 12:12pm by admin
Cartel managing director Carl Wright is warning the sub-prime market is in crisis and runs the risk of becoming the next big mis-selling scandal.
He says the recently announced Financial Service Authority investigation into the market will discover that a significant number of brokers are wrongly advising clients to take out sub-prime mortgages when 50% of them could take out a near prime mortgage.
Wright says: “A significant number of intermediaries are putting customers onto sub-prime mortgages when 50% of them could go on a near prime deal. When the FSA investigates sub-prime it is going to realise that this is not treating customers fairly and is going to want to know why advisers recommended this.”
Wright says debts and arrears have increased over the past 10 years but people have reacted by borrowing more, not spending less. He says this is also contributing to a sub-prime crisis.
Wright warns that while some lenders have realised they have taken on business that could be placed elsewhere, others have still not put their houses in order and will fall under the FSA spotlight when the investigation is carried out.
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