Sunday, October 28, 2007
yuk – subprime
John Charcol warns of increases in repros next year - hardly news or a unique spin. But interesting none the less"The subprime mortgage market is not as big as in the US nor is the lending considered as high-risk or irresponsible. UK subprime lending is thought to account for around 9 per cent of the total mortgage market, with "heavy adverse" - borrowers who have multiple court judgments or are recovering from bankruptcy - making up around 20 per cent.Nor has subprime lending in the UK been as aggressive as in the US. However, it has been cheap - most mortgage brokers say too cheap. Borrowers have therefore been able to obtain larger mortgages than they perhaps should have done, which have become unaffordable as rates have risen."