View more on these topics

Square up to lending problems

If the Council of Mortgage Lenders does not think it has sufficient data for the sub-prime market, then it had better get a handle on it soon.

With fears of an increase in repossessions of as much as 50 per cent, there is clearly cause for some concern.
The CML believes this is the area where most repossessions will occur, hardly a surprise, given the nature of the sector.

But it is vitally important that trade bodies, lenders and mortgage IFAs and brokers prepare themselves for possible problems in the market.

Among other things, it may well be viewed as a test for regulation of mortgages by the FSA and many in the consumer lobby.

Repossession is where the clearest consumer detriment occurs, not exit fees – annoying as they may be.
But the fears of the CML and the admission by the trade body that it cannot comment with credibility on this market are serious.

In many ways, brokers have seen their role as securing a mortgage for someone wanting to borrow to buy a home, which is surely why many people use brokers in the first place.
It is also the case that in some cases, in particular, self-cert, there have been some abuses.

In addition, there are fears over interest-only mortgages, with some borrowers not putting enough into a repayment vehicle.

These issues need to addressed with urgency because they threaten to leave people without a home.

Place that alongside the problems with payment protection insurance or at least the mortgage payment protection insurance part of that market and it begins to look very worrying.

In the meantime, we hope the PPI market cleans up its act, the 200,000 people either have something squirreled away to pay their capital and that sub-prime has been doing what it should be doing – helping people in non-standard situations or with a chequered credit history to get on the housing ladder.

But to do so, the mortgage industry, led by the Council of Mortgage Lenders, had better get up to speed first.

Recommended

IFA in legal battle over renewal cash

An IFA firm says it is taking court proceedings against network Kilminster Financial Management, claiming it is owed over 10,000 in renewal commission. AM&A Investment & Pension Planning managing director David Marks says he left KFM in February to become directly regulated and claims that despite repeated requests, KFM has failed to supply novation agreements […]

Making plans for Nigel

Nigel Thomas, who has been managing the Axa Framlington UK select opportunities fund since it was set up over three years ago, has one of the best long-term records of any UK fund manager, first at Carrington Pembroke, which was taken over by ABN Amro, and now with Axa Framlington.

L&G looks to develop fund range

Legal & General Investment Management is looking at expanding its range of actively managed funds with the launch of strategic bond, high-alpha and hedge fund products. The news comes in the same week that L&G IM ditched its European equities team of four, headed by Alia Baig, and moved its underperforming 156m European fund to […]

Flexible reversionary trusts and estate planning

The suitability of different estate planning solutions will depend on the individual’s own circumstances, needs and objectives. When considering the different solutions available there is a trade-off between inheritance tax (IHT) efficiency and access. Overall a flexible reversionary trust provides a greater level of flexibility than a discounted gift trust and can offer individuals a […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com