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Subprime Lending

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Here we go again…

05/08/2013

http://www.mortgagesolutions.co.uk/mortgage-solutions/news/2286817/heavy-adverse-credit-repair-mortgage-lender-launches-pilot

Magellan Homeloans, the first lender willing to consider rehabilitated heavy-adverse borrowers since the credit crunch, has launched a pilot with plans to distribute through eight Appointed Representative (AR) networks.

The service is aimed at adverse credit borrowers over the age of 25, which it describes as ‘disenfranchised' by traditional high street lenders, but who have retained a clean credit record for the last 12 months.

The loans will be available in England and Wales for purchase or re-mortgage up to a maximum of £400,000 which includes debt consolidation.

Minimum income of £25,000, from employment or self – employment. CCJ’s, missed mortgage and unsecured payments accepted, BR orders, IVA’s AND DMP’s considered.

Max LTV 75% One rate LIBOR + 8.00% currently 8.55 (ouch!) England & Wales only. FTB’s accepted.

No ERP’s No credit scoring

Magellan Homeloans is a haven of subprime hierarchies.

Matt Gilmour, co-founder and CEO of Infinity Mortgages and co-founder and former CEO of Unity Homeloans, both non-conforming UK residential mortgage lenders. Clive Willson has also joined the team as sales director at Magellan, formerly the sales and marketing director of Beacon Homeloans and head of sales at Future Mortgages.

Edited by neontetra

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75%LTV and 8% interest seems like some way towards a realistic risk assesment.

Plenty of lenders pumping lower rates and higher ltvs, but they are high street lenders so must be 'prime'...

+1, They seem to be realistic about the risk this time. Not 95% LTV the stupidly low IRs of 6+ years ago.

Was the UK sub-prime lending pre-2007 IO or repayment? (I never looked in to that type of lending then)

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+1, They seem to be realistic about the risk this time. Not 95% LTV the stupidly low IRs of 6+ years ago.

Was the UK sub-prime lending pre-2007 IO or repayment? (I never looked in to that type of lending then)

Dunno about subprime regards IO/repayment, I guess a lot of IO in there, but without evidence, more just based on self-cert, the sub-primer's sub-prime.. I remember reviewing paperwork related to the sale of a council house via a subprime mortgage lender. The council provided a statement to say that the tenants were months in arrears on their peppercorn rent, the subprime lender duly approved the loan regardless. The RTB discount allowed a safe margin for error, and plenty of opportunity to flog adds-on like PPI and other insurance products to divert as much of the instant equity to the lender as possible. They owners were repossesed soon after buying the place and back being rehoused by the council within 18 months, children in tow. Basically a no lose situation for subprime lenders at the time. Can't remember if it was interst only though, I'm inclined to say it wasn't in that instance as I raised an eyebrow at the fact the mortgage payment was approximately treble the rent they couldn't pay.

edit words.

Edited by cheeznbreed

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Dunno about subprime regards IO/repayment, I guess a lot of IO in there, but without evidence, more just based on self-cert, the sub-primer's sub-prime.. I remember reviewing paperwork related to the sale of a council house via a subprime mortgage lender. The council provided a statement to say that the tenants were months in arrears on their peppercorn rent, the subprime lender duly approved the loan regardless. The RTB discount allowed a safe margin for error, and plenty of opportunity to flog adds-on like PPI and other insurance products to divert as much of the instance equity to the lender as possible. They owners were repossesed soon after buying the place and back being rehoused by the council within 18 months, children in tow. Basically a no lose situation for subprime lenders at the time. Can't remember if it was interst only though, I'm inclined to say it wasn't in that instance as I raised an eyebrow at the fact the mortgage payment was approximately treble the rent they couldn't pay.

I always suspected UK sub-prime was repayment and that self cert (which I regards more as fraudulent liar loan/ primes's sub prime based on the IRs and LTV) was more of mixture of IO and repayment as the arrears rate was lower. I suspect Jack from the news board would know.

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Here we go again…

05/08/2013

http://www.mortgagesolutions.co.uk/mortgage-solutions/news/2286817/heavy-adverse-credit-repair-mortgage-lender-launches-pilot

Magellan Homeloans, the first lender willing to consider rehabilitated heavy-adverse borrowers ...///.....

Thanks neontetra --

But of course PREDATORY LIAR LOANS NEVER stopped as far as I am concerned......

Otherwise - how could 98% of people ACTUALLY "AFFORD" to pay the stupid "prices".....

Nope...... PREDATORY LIAR LOANS in one form or another are alive & kicking..... Seriously - just think to yourself...... HOW could anyone actually AFFORD to "buy" a property in this God-foresaken country if they REALLY TOLD THE TRUTH - to THEMSELVES [!!!] ..... let alone to anyone else...... & don't forget - they're being URGED to tell lies by the very people who are LENDING them the "money".....!!

You couldn't make it up..... :rolleyes:

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first lender willing to consider rehabilitated heavy-adverse borrowers since the credit crunch,

Well at 8% interest they will not be rehabilitated for long.....anyhow where will they get the 25% deposit required?....borrow it.

This is a no loss for the lender, high returns whilst they can still pay and 25% of the value in their back pocket once it is repossessed taking all fees and costs into account..... ;)

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first lender willing to consider rehabilitated heavy-adverse borrowers since the credit crunch,

Well at 8% interest they will not be rehabilitated for long.....anyhow where will they get the 25% deposit required?....borrow it.

This is a no loss for the lender, high returns whilst they can still pay and 25% of the value in their back pocket once it is repossessed taking all fees and costs into account..... ;)

Exactly...

But this is just the beginning - the initial SP lending started with deals like this. High interest rates and low LTV's. It won't last long, before we know it the difference between prime and sub prime mortgages will be minimal. Is it just coincidence that this was released at the same time as the Funding for lending? I am interested in who is backing this lending and what promises have been made if a bail out is required (which is likely). Or should we just take it for granted that the tax payer will oblige... again.

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Exactly...

But this is just the beginning - the initial SP lending started with deals like this. High interest rates and low LTV's. It won't last long, before we know it the difference between prime and sub prime mortgages will be minimal. Is it just coincidence that this was released at the same time as the Funding for lending? I am interested in who is backing this lending and what promises have been made if a bail out is required (which is likely). Or should we just take it for granted that the tax payer will oblige... again.

They are DESPERATE out there........ DESPERATE. Despite all you read about the "rise" in prices - and the "increased confidence"..... LOADS of people - especially out of London - just cannot sell their houses.... They are sitting on the market for YEARS in many cases....

Just don't believe the VI PR CRAP that is being massively & aggressively peddled in all media at the moment...

It is just that ---- PR CRAP.

Edited by eric pebble

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