If there was a magic wand that could banish the words non-conforming or sub-prime from the memory bank of the nation I wonder how many in our industry would use it.
Maybe if we could subliminally convert these words to the phrases ’not quite vanilla’ or ’just a little unconventional’ the deals would not be viewed with such distain by certain parties.
Of course, it’s not the words themselves that put the regulator and potential investors on edge, it’s the underlying problems caused by this area of the market that have left an almighty financial hangover.
Of course, there’s no getting away from these words however we dress them up, but there’s also no getting away from the growing need for such products.
As a result of the recession more people are being left with impaired credit ratings. This is a fact of life and inevitably will lead to some kind of revival in the specialist markets.
Kensington says it will consider lending to applicants with defaults and County Court Judgements but many commentators – Kensington included – have been quick to play down the notion of a significant return to sub-prime.
But surely this can’t be too far away, in some subtle guise at least. Where demand and profit are evident there will be no shortage of providers ready to dip their toes in the water.
We don’t want to go back to the days of irresponsible lending but a compromise must be found soon or the number of ’not quite vanilla’ clients will continue to grow and find borrowing impossible.