Sub Prime lenders

emmaHarris_2 · 20 April 2006 at 12:05PM

Many people today find themselves having to take a mortgage with a sub prime lender. Not many people understand the difference between prime lenders and sub prime lenders. Most sub prime lenders advertise or imply that they are comparative to normal high street prime lenders.

Repossessions or applications for eviction orders are not recorded in England & Wales of sub prime lenders actions in this respect and as such the current escalating rise in repossessions today does not reflect reality and indeed it is thought you could actually treble the current reported figures.

Most sub prime lenders are in the buy & sell game. They approve applications, borrow monies to lend and then sell quickly to an SPV (Special Purpose Vehicle) created to account for the whole loan sale or securitisation process.

The mortgage portfolio is then outsourced to a company like HML or who at the end of the day is a call centre debt collection agency only. The new 'mortgage' company do not employ Mortgage Advisors, this leaves the borrower in the last chance saloon, and if a problem arises over the term of the mortgage, they are very quick to go to repossession. They know also that as sub prime lenders and as SPV they are not being recorded and the prime lender who owns the SPV does not have to front the repossession volumes as this is carried out under the obscure SPV name.

They lend to people who have adverse credit but also to newly started business ventures, enticing borrowers from the Prime market. When the business starts to have problems the original lender is nowhere to be seen as, the mortgage has been sold to a non-lending mortgage entity (in letter head only). This is despite the enticing advertisements on their sites and brochures.

HM Treasury are supporting this and contrary to the belief that sub prime lenders are helping society and lending to those who would normally not have the opportunities of home ownership and be able to borrow, the truth is that they make a quick profit by selling you which again has a negative impact on society overall, dumping their long term responsibilities back on to local councils.

They have without doubt hijacked HM Treasury and the newly formed FSA by being part of the evolving process and committees that created the FSA rules. In the 1980's these people were around selling at very high interest rates and although these rates have come down the impact has not. The HM Treasury has caved in to all thier demands where commercial interests could be effected.

People are actually dying...see http://www.townandabout.com/cgi-bin/Yabb2/YaBB.pl?num=1140514842

Once the mortgage is transferred or sold HML operate the debt collection agency. There are abuses occurring where they then increase interest rates without providing background detail and only deal with those who question through persistency the rise. See:
http://www.townandabout.com/cgi-bin/Yabb2/YaBB.pl?num=1144830622

This is a blatant abuse of trust and one that can only work on the principle of gain and that consumers do not generally question letter headed information from their mortgage provider. This can account in obtaining receivables of millions of pounds per annum.

The general awareness of how sub prime lenders operate is scarce. They understand that they are similar to High street lenders/mortgage companies and accept with trust the letter headed communications. They are certainly not aware that sub prime lenders buy & sell mortgage portfolios, have then an emphasis on portfolio performance as oppose to providing customer service and the services you would expect to help people in trouble, despite their previous records and history.

It is sometime better to rent and fix your credit than take a mortgage out with sub prime lenders .. Long term thinking is requi

mummytofour · 20 April 2006 at 1:33PM

It is sometime better to rent and fix your credit than take a mortgage out with sub prime lenders .. Long term thinking is requi

Only to true!

homer_j_3 · 20 April 2006 at 5:34PM

whats the agenda for this post? what are you trying to achieve? what positve steps have you taken to tell people how they can fix their problems?

I have just read some of the forum you link to and you seem to be verty biased and clueless about what is going on fully.

Ian_W · 20 April 2006 at 6:03PM

I think it's :spam: actually homer. The links may well be pay per click and it's a strange post to link to a site where it opens as compare mortges/ loans etc. The homepage is even promo'ing bet 888.

Very strange first post and a lot of work but still looks like :spam: to me!!

homer_j_3 · 20 April 2006 at 6:17PM

You could be right but a lot of the stuff they are saying is cleary the product of a frustrated bunch of people.

I live near skipton and know a fair bit about the company that they are talking about which indicates they may not be spammers. Anyway, it has given some humour to my day..

emmaHarris_2 · 24 April 2006 at 12:55PM

Hi everyone and thank you for replying. We are not ‘spammers’ I can assure you and it seems by the responses that not many here understand the sub prime markets, securitisation and/or whole loan sales and its practices. Living near Skipton will therefore place you in a prime location to observe the growth of HML, they are there and exist to serve the sub prime lenders and SPV's. There is no pay per click involved.

In regard to being very biased and clueless we respect your views and opinions, however it becomes more transparent by the day that this market and industry is not all what it seems to be. You can be assured that we will publish positive views but to date none have been received.

In regard to what we are trying to do in advising people how to fix their problems without having to rely on the sub prime market there is yet more to be published, however priorities have to be set and first is acknowledging there needs to be change and more transparency of lenders intentions and real motivations.

As you will see in the forum we are in discussion with HM Treasury, FSA, CML, MP's and other entities and challenging the status quo. As a mortgage advisor any changes to the current market conditions will and could of course affect your future business.

I am sure you are all aware of the steep increase in property repossessions but it is true that in England & Wales sub prime lenders and SPV's are not calculated in these figures. Some of you will also be aware that there is a whole difference in providing an adequate customer service versus mortgage portfolio management.

emmaHarris_2 · 24 April 2006 at 1:12PM

Here is a small snippet of how people can be helped without having to resort to the sub prime market...when a borrower find him/herself in arrears due to unforseen life circumstances then maybe there are company's who recognise the current market trends and opportunities 'could or 'may' pay the arrears on behalf of the borrower. This of course can also happen when sub prime lenders being so quick to repossess (normally after 1 to 2 months default) and stave off the adverse implications of such actions. This is not in the sub prime lenders interest.

It should also be noted that sub prime lenders in the main do not employ mortgage advisors and as such they can only resort to repossession action and advising the 'lender' only serves to alert them of possible negative affect on the portfolio performance overall. Who knows what is coming around the corner next!

emmaHarris_2 · 24 April 2006 at 1:24PM

If you feel you can value we are more than happy to accept your opinions and intelligent debate on our forum, but we suspect that due to the lack of understanding of these markets that you are unable to do so. This is the reasons we have posted here and ask you to forgive us for posting in the wrong catgeory if that has been the case.

emmaHarris_2 · 24 April 2006 at 1:47PM

Please also remember we have only just started the forum. Mortgage World is being created as we speak. Although the site enjoys over 3.5k visitors per day and is highly ranked our new venture does not stop at the forum. This is not an advertisment and as you may see its not a small site or business. We hope that anyone who is able to provide any value to these discussions will do so. Our ethos is in line with this site and Martins aims and objectives.

emmaHarris_2 · 24 April 2006 at 2:26PM

homer_j wrote:

You could be right but a lot of the stuff they are saying is cleary the product of a frustrated bunch of people...

Although the Daily Mail states that the Halifax is responsible, we suspect that it may be more of a subsidary of the Halifax created concluding the purchase of sub prime mortgage portfolio...so 'frustrated' yes, maybe...should this really happen in the United Kingdom in 2006?

http://www.townandabout.com/cgi-bin/Yabb2/YaBB.pl?num=1140514842

Frustrated yes possibly but not for ourselves. This is just one example in a long line of such events happening today. Your continued views are welcome.

How many mortgage advisors are sending people in this direction not really understanding the full implications of the resulting treatment borrowers experience once in the sub prime market. Well...they have their commissions anyway!

emmaHarris_2 · 24 April 2006 at 2:44PM

p.s. In Scotland they are just starting to record sub prime lenders repossession & eviction rates in every court...they suspect highly that this is having a social impact...low & behold...Kensington Mortages market share drops and they withdraw from the region.

Sub Prime lenders

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