Trade body refutes sub-prime allegations

The Intermediary Mortgage Lenders Association (IMLA) has reacted strongly to Liberal Democrat claims that sub-prime lenders are unwilling to commit to new guidelines for lenders.

Peter Williams, IMLA’s executive director, said: “We strongly refute the suggestion that sub-prime lenders are failing to treat customers fairly. Vince Cable’s claim that sub-prime lenders are unscrupulous and failing to meet the same standards as mainstream lenders in their customer offerings is yet another inaccurate and misleading comment on this market.

“Vince Cable fails to understand that sub-prime lending has essentially been mainstream mortgage lending. There are a significant number of ‘ordinary’ borrowers and lenders in the sector. Sub-prime lenders are fully committed to working with borrowers in difficulty to help them avoid possession - and already engaged in all the agendas the CML is talking about.

“It is of course in lenders’ interests that borrowers remain in their homes - and, accordingly, that they exercise forbearance and flexibility towards individual borrowers’ circumstances - not least because it is not an easy market in which to sell a property.”

Williams said IMLA members are actively taking steps to assist borrowers facing problems. As an example, in the past week, one major lender in this market, GE Home Lending, working with the Foundation for Credit Counselling, is now piloting a free mortgage advice service for borrowers with financial difficulties and other lenders are also devising schemes.