Mortgage lenders could be tempted into making riskier home loans as they search for new sources of revenue amid fierce competition, a new report by a credit rating agency suggests today, says the Financial Times .
The study says lenders offering home loans many times larger than borrowers' salaries and loan-to-value (LTV) ratios of 95% are the start of a worrying trend. Julia Peach, senior vice-president at Dominion Bond Rating Service, which produced the report, said she believed lenders were being pushed into this type of lending because of intense competition, says the paper. She stated: "Higher multiple and higher loan-to-value lending is the beginning of an ongoing trend. Not only are Abbey and others lending five times single or joint salary, but they are also heavily marketing lending at...
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