Wednesday, Feb 13, 2008
The UK's subprime problems have arrived
BBC "News": Sub-prime dominates repossessions
"Sub-prime lenders are bringing more than half of UK repossession orders, despite accounting for just 6% of total mortgages, a BBC report has found."
As well a BBC report might find that to be the case.
The reality is somewhat different - "Non-conforming" lending – including buy-to-let, self certificated mortgages, equity release and subprime – represents 30 per cent of the market according to the Intermediary Mortgage Lenders Association (IMLA).
Posted by paul @ 11:29 AM (322 views) Add Comment
3 Comments
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1. paul said...
And remember - subprime in the US was around 4% of their total market. So even if we believe the VI's figures, the UK's subprime problem is far far bigger than anyone will admit yet.
2. lvmreader said...
The label "subprime" is just that. A label. And a bad one
What we face here is a mispricing of risk. Period. Especially to those who are overlevered
The idea that "unemployed black men in string vests sitting on a porch in Alabama" are the root cause of this is nonsense. That segment of the market was always dwarfed by the so-called "middle classes with good-credit" who just wanted that bigger house, better car, more exclusive holiday and more nights out at restaurants.
3. Last_days_of_disco said...
@lvmreader
Yeah, but the imagery it evokes is deeply funny and had our office laughing our heads off -- it does illustrate the conflict of interest that has allowed banks to do such deeply stupid things.
You are right however, it's the decadance of the middle class, who have been sucked in due to their lack of real morality. Now they are going to turn around and blame everyone else for their crass stupidity. The vaguely worrying sound of crinkling credit card receipts in the bottom of the beautiful kid leather handbag is now beginning to take on a horror undreamt of.