Mortgage lenders wipe thousands off borrowers' debts
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GMAC-RFC- which stopped lending to new customers last year - says it is piloting the move with around 300 borrowers in a bid to free up funding and also help borrowers reduce the loan to value of their mortgage to 80 per cent following falls in property prices.
Former Morgan Stanley lender Advantage, which stopped lending in 2008, is understood to be offering borrowers a similar deal, although no one at Morgan Stanley was available to confirm the details at the time of writing.
MoneySavingExpert.com reports that Advantage offered one borrower the chance to wipe £25,000 off their mortgage.
Meanwhile, nationalised lender Bradford & Bingley is offering borrowers the chance to remortgage elsewhere without paying an early redemption charge if they do so before June 30.
Edeus offered a similar "golden goodbye" scheme last year to help borrowers in negative equity and Exact offers a mortgage asset reduction strategy which it white labels for other lenders.
GMAC-RFC director of marketing Jeff Knight says: “How much people are able to wipe off their mortgage will vary for different borrowers and the offer will not necessarily be available to everyone.
“It will help people who want to remortgage away and, from our point of view, it will free up funding.”
GMAC-RFC is referring customers who want to seek financial advice on the initiative to London & Country.
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