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No surprise over sub-prime withdrawal say brokers

Premier Mortgage Service managing director John Malone says he is not surprised by the amount of UK non-conforming lenders withdrawing their sub-prime mortgage range from the market.

Money Marketing today broke the news that Unity Homeloans and Infinity Mortgages have become the latest non-conforming lenders to confirm they will be withdrawing their entire sub-prime mortgage range for the immediate future. They follow DB Mortgages’ move earlier this week.

All three lenders claim they have not completely withdrawn from the sub-prime market and will return after re-pricing their products.

Malone adds: “I think we’re going to see a lot of lenders retracting from the market now and lying low for the next few months. None of it surprises me as I have expected it to happen for some time now.”

Robert Sterling managing director Kevin Duffy says the key question is whether this is the start of a domino effect.

“We are seeing the contagion coming over from the Atlantic. The organisations lending that money in the US also have a stakehold in the UK market so it is clearly going to have an impact.”

London & Country mortgage specialist James Cotton says: “We’re definitely seeing ripples of it hitting the UK but it’s hitting everywhere around the world. Global banks have such enormous holdings all around the world that they are just keeping an eye on the level of their exposure.”

Duffy adds: “The question is also whether we are going to make it through the next few months without one of the big players withdrawing? That’s the $64m question.”

But Malone says that he thinks the big players like Edeus, GMAC-RFC and Kensington will be okay.

Malone adds that PMS does not have lenders such as DB Mortgages, Unity Homeloans, Rooftop and Victoria on its panel so will be immune to what is happening, noting that he only works with the more established players.

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