Mortgage brokers have questioned the role of the Council of Mortgage Lenders in the Northern Rock debacle.
Speaking at a Money Marketing sub-prime round table, Robert Sterling managing director Kevin Duffy compared the situation with when Victoria went into administration and both TMB and GMAC-RFC quickly arrived with lifeboats for its clients.
Duffy said: “It was clear there had been conversations going on about how they could rescue the fortunes of packagers and consumers before Victoria made an official announcement about its administration.
“It does strike me that nothing of this kind happened between the CML and other lenders. Is it another example of the CML perhaps being underweight in terms of getting things done?”
Em financial managing director Roger Morris said that when it was told on Monday morning that Victoria had gone under admini-stration, it had a case completed that afternoon with GMAC-RFC.
“The discussions had taken place over the weekend and every Government-backed body was available to talk to Victoria that weekend. I know that Victoria’s directors were very warmed by the co-operation and how things were handled.”
But John Charcol senior technical manager Ray Boulger pointed out that the Northern Rock crisis was on a hugely different scale. He said: “Northern Rock is a different ball game completely. One of the key reasons why the supposed deal with Lloyds TSB could not go ahead was because the Bank of England would not extend the guarantee to the new purchaser.”
“If all the banks were struggling to raise funds, which clearly has been the case, then to co-ordinate a rescue for Northern Rock would be difficult. I do not think that it is fair to criticise the Council of Mortgage Lenders. If the Bank of England could not do it, then the CML definitely could not either.”