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eric pebble

Baron Rothschild And The House Of Sub-Prime Lenders .

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Baron Rothschild and the house of sub-prime lenders.

The backing could hardly be more blue chip. Baron Rothschild has invested and Lazard is advising. But as well-known brands such as Virgin and famous figures in finance such as Lord Levene, the former Lloyd's of London chairman, muscle their way into High Street banking and mortgage lending, this pretender is expected to raise eyebrows.

Although Portillion itself is new, it is run by a group of executives whose names are quite familiar to the Financial Services Authority - which decides who gets a banking licence.

The top executives worked together at the British arm of GMAC Financial Services, initially set up by US giant General Motors as a way to provide car buyers with finance. GMAC expanded into other types of lending including becoming a major player in the US sub-prime mortgage market that later lit the fuse for the global economic meltdown.

The British division, GMAC-RFC (Residential Funding Corporation), followed a similar path, specialising in lending to those often turned down by other mortgage companies. It left a trail of disaster.

...///.....

The FSA fined the group £2.8 million for 'failing to treat customers fairly' and ordered it to pay £7.7 million in compensation to 46,000 customers it had mistreated.

The watchdog's 14-page judgment said the group had jumped the gun in ordering repossessions that were 'frequently made by GMAC without evidence that other viable options had been considered and that repossession was being used only as a last resort'. It also found that the group imposed charges on customers in arrears that were 'excessive and unfair' and which 'were not a reasonable estimate of the costs'.

One of the root causes of the problem, the FSA said, was inadequate training of staff. While the watchdog did not conclude its disciplinary action until 2009, the offences all related to the period between 2004 and 2008 and in particular arrears handled in 2006-2007 - periods when the Portillion trio were all at GMACRFC and when Knight was executive chairman.

Part of its strategy was to sell on large parts of its mortgage book to bigger lenders and in 2006 it clinched a deal with Bradford & Bingley, which agreed to take billions of pounds worth of mortgages.

Read more: http://www.dailymail.co.uk/money/article-1341528/Baron-Rothschild-house-sub-prime-lenders.html#ixzz19JzbLSFe

Edited by eric pebble

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  • 276 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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