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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.”

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