View more on these topics

Britannic&#39s sub-prime CAM labelled a &#39PR product&#39

Rival lenders and brokers are accusing Britannic Money of putting vulnerable borrowers at risk by setting up the first sub-prime current account mortgage in the UK market.

Specialist lender Future Mortgages says it is concerned about the practical implications of giving flexible features such as payment holidays and underpayments to people who have problems managing their money.

National broker franchise Mortgageforce says although being able to offset savings against debt could work, Britannic Money&#39s Restart Homeloan, launched last week, will have a minority appeal as sub-prime and CAM borrowers are opposite ends of the spectrum.

One source has slammed BM&#39s move as a publicity stunt, claiming it has produced a “PR product” as part of a “lazy marketing strategy”. It warns that sub-prime and CAM mortgages require very different underwriting skills and questions whether BM has thought this through.

But BM says it is not moving away from responsible lending but has to balance risk and prudence and that prime lending will remain its focus.

Strategic development manager James Mayne says: “Borrowers cannot underpay unless they have overpaid and we have made the decision to only offer the current account facility after a year.

“We realise the need for specialist skills and are initially distributing the product through three experienced packagers.”

Future Mortgages communications manager Richard Hurst says: “We are pleased to see a new product on the market but we are concerned about the practical implications in terms of how sub-prime borrowers manage their finances with the flexible features.”

Recommended

Model partnership

In two previous articles I have highlighted some of the reasons why so-called wealth management models have struggled to deliver a result and also offered my thoughts as to some of the necessary ingredients for a successful model. I now wish to explore how we may best be able to get the right leverage in […]

New pension quotation service from The Exchange

The Exchange is launching a new comparative quotation service that enables IFAs to compare pension products and providers on retirement benefits, fund values, charges, transfer values and product features.The service offers compliant customer specific quotes and illustrations for individual pension products. The Exchange general manager Sue Summers says: “Pensions are becoming an increasingly complex area […]

Key player plan for top sports clubs

Top football and rugby clubs can cover the cost of replacing multi-million-pound stars with a new life insurance plan from Sun Life Financial of Canada.The plan pays a lump sum on the death of a player up to a pre-agreed maximum. It is available to Premiership and Nationwide League football clubs and Premiership rugby clubs.In […]

New customer service director for Scottish Life

Scottish Life is appointing Isobel Kennedy as customer service director as John Wallace retires from the post after 35 years service.Kennedy moves from her post as head of customer services at Royal London&#39s Wilmslow operations centre.Scottish Life chief executive Brian Duffin says: “I am delighted to welcome Isobel to our senior team. She will bring […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment