Sub-prime lenders unlikely to follow repossessions guidance

  • Story by: David Pawsey
  • Magazine: MortgageAdviser
  • Published Thursday , June 05, 2008

Sub-prime lenders may not be as willing to sign up to the Council of Mortgage Lenders' (CML) guidance on repossessions as mainstream mortgage providers, warned the Liberal Democrats.

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In a letter to Chancellor Alistair Darling outlining lenders' commitment to help those who could be experiencing problems paying their mortgage as a result of the credit crunch, the CML have proposed a uniformed approach to dealing with arrears. (See related article.)

However, Vince Cable, shadow chancellor for the Liberal Democrats, said lenders were not obliged to follow the proposed practices so they could not be enforced.

He said: "This CML statement is welcome, but we must wait to see if these declarations of intent are actually implemented. What will the penalty actually be for CML members who ignore the guidelines?

"There are many sub-prime lenders and other creditors who do not have the scruples of the main mortgage lenders.

"Unless these guidelines are enshrined in law, it is difficult to see what impact they will have on the spiralling number of repossessions."

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