Converted Lurker Posted July 13, 2007 Share Posted July 13, 2007 Has anyone noticed how quickly we've gone from "there is no sub prime in the UK" to it being an accepted part of finance news commentary? A leading City law firm is warning that The Financial Services Authority's damning report on the sub-prime mortgage industry last week could eventually lead to a flood of claims against lenders and advisers... Law firm Reynolds Porter Chamberlain is predicting cash-strapped borrowers struggling with payments could capitalise on the FSA's report and make claims against both lenders and advisers. The sub-prime sector lends to those with poor credit records, borrowers' mortgage arrears are currently running at 20 times those of conventional mortgages, a trend that is expected to rise following the latest interest rate hike. http://firstrung.co.uk/articles.asp?pageid...&cat=44-0-0 Quote Link to comment Share on other sites More sharing options...
RichB Posted July 13, 2007 Share Posted July 13, 2007 I didn't want to do it mlord, the adviser forced me. Quote Link to comment Share on other sites More sharing options...
Converted Lurker Posted July 13, 2007 Author Share Posted July 13, 2007 I didn't want to do it mlord, the adviser forced me. Lenders could argue that they set their own rules, "if we don't want to underwrite and be reckless in our lending, then that's our business, that's our risk". However, the FSA (as the consumer champion) will see it completely differently. Also when sub prime lenders are 'repoing', if it's proven that they lent when the customer had little/no chance of paying back the loan based on their salary, then they may struggle to gain possession. Certain underworked lawyers may see this as the next 'ambulance chase', they'll have to do something to replace conveyancing. (no disrespect to the quality lawyers who frequent this board Laywers could in theory test the legality of these mortgage contracts. This could run and run or be buried... Quote Link to comment Share on other sites More sharing options...
The Colour Posted July 13, 2007 Share Posted July 13, 2007 I would certainly imagine lenders who contacted borrowers and cold-sold them stuff could be held accountable. I think it's different when a borrower actually seeks the lender out. Many people didn't need to be fed bullshiat to sign on the dotted line as they were too caught up in the heady whirlwind of property procurement. Quote Link to comment Share on other sites More sharing options...
THE BALD MAN Posted July 13, 2007 Share Posted July 13, 2007 Has anyone noticed how quickly we've gone from "there is no sub prime in the UK" to it being an accepted part of finance news commentary? A leading City law firm is warning that The Financial Services Authority's damning report on the sub-prime mortgage industry last week could eventually lead to a flood of claims against lenders and advisers... Law firm Reynolds Porter Chamberlain is predicting cash-strapped borrowers struggling with payments could capitalise on the FSA's report and make claims against both lenders and advisers. The sub-prime sector lends to those with poor credit records, borrowers' mortgage arrears are currently running at 20 times those of conventional mortgages, a trend that is expected to rise following the latest interest rate hike. http://firstrung.co.uk/articles.asp?pageid...&cat=44-0-0 Looks like lawyers trying to drum up some business as there home buying work drys up! Quote Link to comment Share on other sites More sharing options...
Fancypants Posted July 13, 2007 Share Posted July 13, 2007 the country will be rife with litigation, no doubt. Quote Link to comment Share on other sites More sharing options...
South Lorne Posted July 13, 2007 Share Posted July 13, 2007 (edited) the country will be rife with litigation, no doubt. .........yes....but ..the knock on will be a lot less 'loose' credit being thrown around......will affect values.... ...but of course not the debts....... Edited July 13, 2007 by South Lorne Quote Link to comment Share on other sites More sharing options...
Guest Bart of Darkness Posted July 13, 2007 Share Posted July 13, 2007 Law firm Reynolds Porter Chamberlain is predicting cash-strapped borrowers struggling with payments could capitalise on the FSA's report and make claims against both lenders and advisers. Looks like lawyers trying to drum up some business as there home buying work drys up! Law firms advising people to sue. Something tells me that altruism is not going to be their primary motive. Quote Link to comment Share on other sites More sharing options...
Realistbear Posted July 13, 2007 Share Posted July 13, 2007 Has anyone noticed how quickly we've gone from "there is no sub prime in the UK" to it being an accepted part of finance news commentary? A leading City law firm is warning that The Financial Services Authority's damning report on the sub-prime mortgage industry last week could eventually lead to a flood of claims against lenders and advisers... Law firm Reynolds Porter Chamberlain is predicting cash-strapped borrowers struggling with payments could capitalise on the FSA's report and make claims against both lenders and advisers. The sub-prime sector lends to those with poor credit records, borrowers' mortgage arrears are currently running at 20 times those of conventional mortgages, a trend that is expected to rise following the latest interest rate hike. http://firstrung.co.uk/articles.asp?pageid...&cat=44-0-0 The firm quoted, RPC, are experts in professional negligence defense work. I suspect they are busy recruiting more lawyers for that department. Rich pickins ahead. Just goes to show there is a lot of money to be made when there is a crash. I think it was Rhet Butler who told Scarlet O'Hara that its easier to become a millionaire when things around you are crashing down than when things are headed in the opposite direction. I wonder how conveyancing solicitors are doing lately? IIRC young Tuffers is one of those? Quote Link to comment Share on other sites More sharing options...
DrBob Posted July 13, 2007 Share Posted July 13, 2007 This is great news from a HPC perspective! Some of the lenders must be bricking it right now. They'll be tightening up their lending criteria and refusing to lend without solid proof of income and of ability to repay. Credit tightening = reduced demand = falling prices... Quote Link to comment Share on other sites More sharing options...
Serpico Posted July 13, 2007 Share Posted July 13, 2007 The threat of successful litigation is far to risky, just like the banks won't defend an action for claing back charges. it only needs one or two successful actions to start an avalanch. Same as Endowment Policies, if the criteria for action is justified they won't defend just settle it quietly. I had an Endowment that was like this, well past retirement age etc, it was for £25K, however the actual mortgage had been long paid off years before except for a small change balance that I could have paid anytime in the previous ten years. A couple of years ago I got the usual letter it was going to pay a shortfall of just over £17K rather than the £25K and £2K bonus. I hit them with a fully detailed letter outlining that if I did not see at least £27K we would all be having a chat with the Judge, I got all the usual ******** in various replies to legal arguments, it would have left no one in any doubt that I was not making idle threats and I would definitely litigate. At the death I hit them with a fourten day Notice of Intention with a Statement of Truth and supporting documentation. At the time I was sure I was going to have to issue the summons and make my claim through the Courts and had the forms filled in and the cheque For the Court fee made out. I then received a very nice letter from them asking me sign the attached final settlement agreement in full and final settlement, a nice little cheque for a few pounds over £28K was enclosed. This was from one of the biggest Endowment providers who had previously been fined 100s of Ks for misselling. The Silks and Briefs could already be circling the skies like vultures looking for a mighty feast on the next stinking carcas of sub prime mortgages. Quote Link to comment Share on other sites More sharing options...
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