The Return Of Sub-Prime Lending
An article in the Telegraph highlighted the return of bundled, sub-prime mortgage-backed loans and the risk of a return to lending practices which, ultimately, triggered the financial crisis of 2008. The article looks at this development in a rather negative light.
“These mortgage-backed securities which have become the most identifiable trigger for the financial crisis are now attracting fresh interest among investors. This is despite some market experts describing the housing market as a “bubble on a bubble”.
Subprime mortgage lender, Belmont Green, has packeted up and sold more than £1bn of mortgages to investors with high housing market risk appetites, according to The Mail on Sunday.
Those linked to this effort have included former bosses from failed bank Northern Rock, Adam Applegarth, and Lesley Sewell. Guy Batchelor, former senior vice president at Lehman’s european mortgage division, is also now director of sales and marketing for Vida Homeloans, the trading name of Belmont. The lender is controlled by US private equity firm Pine Brook.”
From our point of view, this is a positive. We pride ourselves on being able to help almost anyone to secure their desired loan. This sometimes means that we need to look towards lenders who are prepared to give our clients a ‘second chance’.
As credit searches/scores get more complex and rigorous, we see all sorts of people being denied credit from the better-known High Street lenders. Often, we are dealing with clients who have a good income and stable finances but have made one or two basic mistakes in the past. Sometimes situations are more complex and, for one reason or another, our clients do have a more chequered credit history. In all cases, we are grateful of those lenders who are prepared to consider offering a loan. We have found that those clients who have previously approached us with credit issues are often the ones that go on to build-up very strong credit profiles, such is their understanding of credit-scoring and profiling once we have worked with them.
Over the past six months, we have managed to secure loans for clients with missed mortgage payments, defaults, CCJs and missed payments. In some cases, a combination of two or more.
At Clifford Davis, we can’t comment on the wider systemic issues being discussed in the Telegraph article. However, we are glad of the extra ‘tools’ that we now have at our disposal when trying to help our clients.
If you or anyone you know is trying to secure a loan with a less-than-perfect credit history, make sure that you contact Clifford Davis. We have years of experience in this area and we can almost always find a lender willing to offer funds.
