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September 12, 2007    

Victoria Mortgages placed in administration

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by Gill Montia

Victoria Mortgages, which describes itself as a specialist in the non-conforming mortgage, has been placed in administration.

The company, which provided loans for those with poor credit histories, is the first UK mortgage provider to collapse as a result of the US sub-prime crisis.

It is owned by Venturian Capital, a US-based venture capital firm; UBS, the global financial services group, also helps to fund the business.

Victoria is a small lender with an outstanding loan book of approximately £300 million.

Existing borrowers are unlikely to be affected by its difficulties, as most of its loans have already been sold on to investors.

However, up to 381 borrowers who have not yet completed their mortgage agreements will have to look elsewhere.

The Council of Mortgage Lenders believes that the fate of Victoria should not cause deep concern as most mortgage providers are riding out the repercussions of events in the US by adjusting their product ranges and interest rates.

According to the Financial Services Authority, Victoria held less than a tenth of one per cent of the overall UK mortgage lending market.

The turmoil on the financial markets has prompted other sub-prime specialists, such as GMAC, Mortgages Plc and Kensington Mortgages to increase their rates.

In addition, DB Mortgages, which is part of Deutsche Bank, is no longer providing its sub-prime range of home loans to first-time buyers.

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