Sub Prime lenders

emmaHarris_2

HI Saver Sam, Actually I think your right.

emmaHarris_2

You come accross like a Turing test candidate. If this is your job then who is your employer ?
J_B.

Whose yours? what is a Turing test candidate, sorry but I am learning all the time:)

emmaHarris_2

Well it seems I am all alone here and thank you Saver Sam for bringing the post back to the real topic. I am just fighting my corner here in the hope that we can get back to the more serious issues at hand.

saver_sam

Anyway as a side note, the company who ltd name is on the linked website that emmaharris points to is now dissolved (today according to companies house website) so perhaps the debate on that site will close soon, unless its taken over by another co.

payless

emmaHarris wrote:

Am I computer? No, just my job to do this. We are serious about the concerns consumers have.

are you saying its your job ( paid position?) to post on forums ?

emmaHarris_2

Gosh! First one first. The company has already be sold this year and hence new owners and secondly No, its part of my job. Still not on the issues are we? I wonder why?

payless

Well I'm confused what issues you ( you still kep on with the pural- we !) are talking about.

Yes , to me its seems likely that lenders in this field are more likely to

1. Sell on their book to fund ongoing finance to stay in this market ( as they are not generally retail deposit takers)

2. Come down harder on arrears cases - those that lend in a higher risk market ( often to people will history of late paying) are more likely to
a. Charge higher rates
b. Be less tolerant of bad payers
c. Expect higher margins of security

Now you could compare this to loan sharks working a council estate

1. happy to sell book to a larger gang

2.
a. High rates
b. Heavies knocking on doors- threatening knee caps
c. Taking benefits books as security

Its not ideal , its not fair, but its the market - those that use sub prime lenders should be aware ( or made aware) that it is sometimes last chance saloon . However agree to and meet the terms , and you get whats written on the side of the can.

BTW I am not active in sub prime or money lending markets myself, and disapprove of the way that some brokers seem to distribute sub-prime lending
( large marketing budgets & sales bonuses to staff - all financed by large commission and fees ) + concerns that cases are all too easily sold at a certain rate level, rather than try and place on lower rates

emmaHarris_2

Hi Payless
1. Sell on their book to fund ongoing finance to stay in this market ( as they are not generally retail deposit takers)

I agree, only when asked they will say they do not. They provide no indication or information that they do. Consumers are totally unaware of this practice before entering it.

When asked how do they finance their business they say:
Through higher interest rates
Through early redemption fees

Now you could compare this to loan sharks working a council estate

I agree, legitimate loan sharking through relationships gained in industry bodies and HM Treasury and consultation groups

those that use sub prime lenders should be aware ( or made aware) that it is sometimes last chance saloon

Yes they should be made aware that (1) their mortgage will be sold at a very early stage and to who and what type of mortgage company this will be (3) The FSA should stop authorising subsidiary company's as 'lenders' when they have no intentions of doing so and is only used as window dressing for the portfolio borrowers & (3) That they are unable to help further if the borrower falls into any problems in the future as they do NOT employ Mortgage Advisors and as such cannot provide mortgage advice.

However agree to and meet the terms , and you get whats written on the side of the can

What’s written on the side of the can is not what is inside.

and disapprove of the way that some brokers seem to distribute sub-prime lending
( large marketing budgets & sales bonuses to staff - all financed by large commission and fees ) + concerns that cases are all too easily sold at a certain rate level, rather than try and place on lower rates

Yes we do too. More consumer information should be out there and sub prime lenders should be accurate with the information they provide to borrowers up front.

Brokers & Mortgage Advisors also withhold this information when placing a borrower with a sub prime lender. Imagine for one moment that potential borrowers were told that their Mortgage will not be with the selected/chosen mortgage company and will be immediately transferred to another and sometime obscure company who will administer ONLY the account. That there is no provision for further funding or any grace period if the borrower falls on hard times (even outside their control and despite plans to overcome them) - It is a shock to the system after all the nice letter headed presentations and misleading facilities and services available to the borrower.

emmaHarris_2

If information like this was provided up front so as to give the borrower 'real' choice' then there would be no sub prime lenders/market. Most borrowers would not take the risk, some may do but then thats fine, they know what they are gettting into.

payless

I'm hardly an expert in sub prime ( can count one hand the number of cases placed with sub prime lenders in my 18 years of advising on mortgages - and that would be the hand of a very clumsy machine operator ! ) - but from my understanding of the market ( mainly from others in it) even if all this info was disclosed up front ( together with a contract to give up their first born) many customers of sub prime ( mortgages and secured loans) would still want the product.