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/24-7PressRelease/ - EDINBURGH, SCOTLAND, March 22, 2006 - MIAS (the Mortgage and Insurance Advisory Service) is concerned that the boom in the sub-prime - or adverse credit - mortgage market will not necessarily translate into a better deal for consumers.
In the past, the worst excesses of the sub-prime market could be summed up as, 'the miss-selling of the most expensive and complex mortgages to some of the least affluent and financially-astute people'.
With so many high street lenders moving into this sector, including Alliance and Leicester and new arrivals such as DB Lending funded by Deutsche Bank, MIAS would hope that this would change. However, the old adage that increased competition is always a good thing for customers, because it brings down prices, may not apply in the adverse credit market.
Commenting, Alistair Good, Managing Director of MIAS (http://www.mias-ltd.co.uk ) said: "The increased profit margins of the adverse credit sector must be hugely tempting to high street lenders. But amidst this flurry of product launches, a note of caution must be sounded: Some of these lenders have limited experience of what is an incredibly complicated market."
With so many lenders with little prior experience moving into this sector, there is a real worry that levels of service could plummet.
Outlining his reservations, Alistair Good said: "This is of particular concern, because lenders' helpdesks need to know their lending criteria inside-out, to enable mortgage applications to be processed quickly. As it is, lenders frequently misadvise on regular high street deals - adverse credit, or bad credit mortgages (http://www.mias-ltd.co.uk/uk-problem-mortgage.htm ) are far more complicated. If the wrong information is given to the advising broker, it could be catastrophic in situations where mortgage offers must be approved quickly - for example, if a re-mortgage is needed in order to prevent a repossession."
Commenting, Roger Milbourn, Director of MIAS, said: "MIAS believes that fast processing is often essential for adverse credit mortgages (http://www.mias-ltd.co.uk/adverse-credit-mortgages.htm ), but more importantly these mortgages should only ever be recommended in the first place as a stepping-stone to high street lenders and good credit. Establishing long-term affordability is therefore key; otherwise a vicious circle can easily occur, whereby a customer grappling with high mortgage repayments falls into arrears - which in turn, locks them into further expensive adverse deals in the future."
For further information, please contact:
0845 833 0878
Managing Director: Alistair Good
Director: Roger Milbourn
Notes to Editor:
The Mortgage and Insurance Advisory Service (MIAS Ltd) is a firm of impartial mortgage advisers, offering a comprehensive service to clients seeking residential and commercial mortgages and mortgage protection.
Founded in 2002, MIAS has quickly gained a reputation for providing straightforward, impartial mortgage advice matching clients up with some of the most competitive deals around. MIAS's experienced mortgage brokers (http://www.mias-ltd.co.uk ), have expertise in all sectors of the mortgage market and look after the whole transaction from beginning to end, making the process as smooth and as headache-free as possible.
Michael is a keen writer, and internet marketer living in Scotland:
Phone: 0131 561 2251
Michael's Website: http://www.gransha-taxi.co.uk
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