Sub-Prime Mortgage Research Help Needed

MSE_Martin

Hi folks,

I've been contacted by the Financial Inclusion Center a new non-profit think tank run by Mick Mcateer the former head of research at Which?. He's working with the National Consumer Council on a new major piece of research and asked if MoneySavers would be willing to take part. The aim is to follow trends around sub-prime mortgage lending to ensure customers are treated well.

If you've time it'd be great if you can help them.

Full details below

Martin

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The Financial Inclusion Centre and the National Consumer Council are looking for consumers to help with research into the way mortgage providers, and in particular ‘sub-prime’ mortgage lenders and brokers, are treating consumers.

We are looking for consumers who took out a mortgage within the past 3 years to tell us about their experiences. In particular, we would like to hear about the following experiences:

· Did your lender or mortgage broker do enough to ensure you could afford the mortgage offered?

· Did they explain what might happen if interest rates changed?

· If you’ve got into arrears or financial difficulties, do you feel they have treated you fairly and sympathetically?

· If you have a fixed rate mortgage, has the lender written to you to explain what the change in monthly payments will be once the fixed rate period runs out?

· If you have a fixed rate mortgage, were you able to renegotiate a new fixed rate deal or did you go onto a variable rate mortgage?

However, we’d like to hear about any other experiences where you felt that you were treated unfairly by your mortgage lender or broker.

Unfortunately, we cannot provide any individual advice or help with individual cases but your help with the research on this important project would be greatly appreciated. We would also like to reassure everyone who does contact us that any details will be treated in confidence.

Many thanks in advance.

Please send your replies to Mick McAteer, email: [EMAIL="mick.mcateer@inclusioncentre.org.uk"]mick.mcateer@inclusioncentre.org.uk[/EMAIL]

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Dan_Collins_2

LOL which hunt!

MSE_Martin

Just a quick note to the mortgage brokers on here. Remember this is a Consumer website; not a mortgage broker one; and its prime remit is to help and look at consumer interests. Comment like Which hunt above aren't helpful.... and the fact some mortgage brokers feel that scrutiny of the industry is a bad thing certainly doesn't help the industry image.

Martin

PS Please dont let this thread go off topic; if it does posts will simply be deleted.

Other thread

It seems one of my team had also started a thread. I've deleted that one now to save duplication. This is the official thread; I've also deleted posts referring to the other thread to save confusion.

Madjock

Martin, thanks for this, I shall send my email later when I have more time. And I do agree with your sentiments above, while I did not have any major problems (probably as I worked for the broker at the time!) I do know that sub-prime does very often involve jumping through fiery hoops to get a mortgage.

keefyboy_2

I don't want to seem ignorant, but can someone explain what a "Sub Prime" mortgage is please, I have never heard of this before.

AndrewSmith

keefyboy wrote: »

I don't want to seem ignorant, but can someone explain what a "Sub Prime" mortgage is please, I have never heard of this before.

Not ignorant at all.

Sub Prime in a nutshell is where an applicant does not fit into the 'normal' model of what a lender would consider a 'prime' mortgage case. This can be for a number of reasons including:

Previous poor credit history
No income proof
No Income or employment history
Irregular or multi income streams
Foreign National or Ex Patriate
Non Standard Property Construction
High level of other borrowings

This is not an exhaustive list but is hopefully enough to give you an idea of what may constitute 'sub prime'

Any one of the above mentioned things on it's own may not have too much of an impact on one's ability to obtain a 'prime' mortgage however it depends on the severity and circumstances. Example, someone with a Count Court Judgment for £500 would not find it too difficult to obtain a regular mortgage. However if that same individual was self employed with no accounts of income proof then he would be most likely looking at a 'sub prime' lender.

Sub Prime is not always a negative, in the right circumstances it may well be totally appropriate to recommend a sub prime lender. However there are/have been some so-called specialist brokers who deal only with sub prime lenders, who have been putting prime customers on sub prime deals at a higher than necessary cost without proper justification.

Hope this helps

Andrew

keefyboy_2

Many thanks Andrew, I think we fall into this catagory, so I will consider contacting them

AndrewSmith

Like I say, just be careful. You may find that you do not need to go down the sub-prime route.

If you contact only a sub-prime broker that is all they will recommend.

payless

An insight to subprime problems

http://www.youtube.com/watch?v=SJ_qK4g6ntM

dunstonh

Here is a quicker explanation:

http://www.youtube.com/watch?v=Z5VeNwG3xms&feature=related

Not quite as subtle as payless' link

Dan_Collins_2

dunstonh wrote: »

Here is a quicker explanation:

http://www.youtube.com/watch?v=Z5VeNwG3xms&feature=related

Not quite as subtle as payless' link

MMMM I am sure I have come across a few chaps like this went out and about at lender confrences and the like!

LOL very funny