View more on these topics

Sub-prime market in crisis

Carl Wright, managing director at Cartel, is warning that the sub-prime market is in crisis, and runs the risk of becoming the next big miss-selling scandal.

The recently announced Financial Service Authorities investigation into the market he says will uncover how a significant number of brokers are miss advising clients to take out sub-prime mortgages, when 50% of those could take out a near-prime mortgage.

He says: “A significant number of intermediaries are putting customers onto a sub-prime mortgage, when 50% of them could go on a near-prime deal. When the FSA investigates sub-prime it is going to realise that this is not Treating Customers Fairly, and it is going to want to know why advisers recommended this.”

Wright says debts and arrears have increased over the past ten years, but people have reacted by borrowing more, not spending less, which he says is also contributing to a sub-prime crisis.

Wright warns that while some of lenders have realised they’ve taken on business that could be placed elsewhere, others have still not placed their house in order and will fall under the FSA spotlight when the investigation is carried out.


Do limited lender panels mean limited advice?

Research showing intermediaries do 58% of their business through just three lenders sparked concern in the industry last week. The findings from Charterhouse Research also showed that brokers are placing business through an average of just 11 lenders, which has caused some to question whether intermediaries are offering the best possible advice to their clients. […]

Base rate freeze is no surprise

The Bank of England’s Monetary Policy Committee has voted to keep interest rates on hold at 4.5%. The decision comes after last month’s cut of a quarter point , the first in two years. Duncan Pownall, mortgage development manager for Bradford & Bingley, says: “This is no surprise. Given the jump in the inflation rate, […]

Unlimited Adverse solutions from Amber

Amber Homeloans Limited has launched a range of Heavy Adverse products with unlimited CCJs and missed mortgage payments accepted. Mike Perry, associate director sales and marketing at Amber, says: This liberal product range provides intermediaries with a selection of competitive options for clients with a large amount of adverse credit history.The product range is Higher […]

Quarter of brokers could go to wall in two years

A quarter of mortgage intermediaries could be forced out of business in the next two years if market forecasts are to be believed. Chairing a question and answer session at Mortgage Strategy’s Mortgage Summit in Jerez, John Malone, managing director of Premier Mortgage Service, told delegates the disparity between the value of the market last […]


News and expert analysis straight to your inbox

Sign up