CAB attacks sub-prime lenders
The Citizens Advice Bureau (CAB) has criticised UK sub-prime lenders, accusing the sector of knowingly providing mortgages that borrowers cannot afford to repay.
The charity goes on to describe lenders as “aggressive” with borrowers who fall behind with their repayments.
In a report entitled Set Up To Fail the CAB maintains that: “Dubious advice from brokers, irresponsible lending decisions and aggressive arrears management by sub-prime lenders are driving the current increase in mortgage arrears, court action and repossessions.”
David Harker, the CAB’s chief executive, explains that the research for the report, which was based on 1,200 case studies, “suggests that many aspiring home owners have been mis-sold unsuitable and costly home loans that are doomed to fail from the start”.
However, the Council of Mortgage Lenders (CML) has called the report “simplistic” and “sensationalist”.
It maintains that “The vast majority of mortgage customers receive a high level of help and care from lenders of all kinds if they fall into difficulties, in accordance with the rules set out by the Financial Services Authority.”
The Council also argues that people seeking help from the CAB are not typical of sub-prime borrowers in general.
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