Adverse loans hard to place

The Regulatory Alliance of Mortgage Packagers says that with lenders struggling to stay in the sub-prime sector it’s unable to place a whopping 25% of all adverse cases.

John Rice, managing director of RAMP, says that while brokers offering prime deals have been relatively unaffected by the liquidity crisis, things look grim in the sub-prime sector.

Rice estimates that compared with six months ago, between 20% and 25% of adverse cases worth billions of pounds cannot be placed.

He says: “You have frustrated cus-tomers and brokers who are sending multiple applications to packagers to try and place cases, but most of the time it can’t be done.”

Meanwhile, has released figures showing that vast numbers of borrowers have made them- selves financially vulnerable to buy property and are not in a position to remortgage.

Nearly 35% of respondents to its recent survey are juggling mortgage debt more than 3x their gross annual salary.

The website says that of these, nearly 30% are unsure whether they would be able to provide proof of income to new lenders.

Both factors seriously weaken their chances of securing affordable loans in the future.

Richard Brown, chief executive of, says: “Many of these borrowers are likely to find it difficult to remortgage now that the days of easy borrowing have come to an abrupt end.

“Fewer and fewer lenders will be prepared to offer competitive alternative deals to clients who are considered at risk of default.”

He adds: “These borrowers will have little choice but to accept what their existing lenders are prepared to offer when their current deals come to an end.”