The Intermediary Mortgage Lenders Association (IMLA) has hit out at Lib Dem shadow chancellor Vince Cable for calling the sub-prime mortgage industry unscrupulous over arrears and repossessions.
The Association says Cable fails to understand the sub-prime market.
Responding to an announcement from the Council of Mortgage Lenders (CML), which outlined steps to reduce repossessions, Cable said any steps would be ineffective unless enshrined in law.
“This CML statement is welcome, but we must wait to see if these declarations of intent are actually implemented. What will the penalty actually be for CML members who ignore the guidelines?” he says.
“There are many sub-prime lenders and other creditors who do not have the scruples of the main mortgage lenders.”
Peter Williams, executive director of IMLA, was not happy with Cable’s assumption that sub-prime lenders will be unwilling to commit to the CML’s guidelines.
“IMLA strongly refutes the suggestion that sub-prime lenders are failing to treat customers fairly,” says Williams.
“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.”
Williams points out that many ordinary borrowers are in the sub-prime sector, and says lenders are working with the CML to prevent repossessions.
“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,” he explains.
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