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Infinity Mortgages next lender to pull out of sub-prime

Investec-backed Infinity Mortgages has become the latest lender to announce it will be withdrawing its entire sub-prime mortgage range from the market on August 17.

A notice on its website says: “As a consequence of significant movements in the market it has become necessary to withdraw our current range from the market with immediate effect.”

The non-conforming lender says that all applications whether fully packaged or unpackaged will need to be received by Infinity by close of business August 17.

It says there can be there can be no exception to these deadlines so it is urging brokers to act quickly to avoid disappointment and will be sending packagers details very shortly of its revised products.

But a spokesman for Infinity Mortgages says that this is not a withdrawal from the market. “Infinity has built its reputation on highly competitive products with a particular focus on fixed rates. There are a number of external factors that have led to the withdrawal of our range from the market.”

He adds: “Firstly Interest rates over the course of the past year have been rising quite steadily with further rises forecast. This means that the pricing of fixed rates in a volatile market is tough right now. Plus the shockwave of the US ‘mini crisis’ has rippled across global capital markets. It is a fact that the global credit market at the moment are weak. However we expect this situation to improve in the short term.”

Infinity says it is working on new products but the pricing has to be right for all counterparties, most of all the customer and the broker. “There will be a lot of movement in rates from our competitors over the coming days as the entire market is exposed to the same challenges.”

This follows the move by DB Mortgages this week which also withdrew its entire sub-prime mortgage range in what could be the first major sign of a credit crunch in the UK market following the deepening US sub-prime crisis.

DB Mortgages says it will be repricing its products and relaunching at the end of the month.

West Bromwich Building Society has also withdrawn its latest residential securitisation mortgage deal, citing difficult market conditions.


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