City watchdog the (FSA) has been investigating the sub prime mortgage sector also called impaired credit mortgages or bad credit mortgages.
The FSA have been investigating this sector for six months, and have admitted that it was surprised at the number of errors uncovered, made by both mortgage brokers and lenders.
The sub prime mortgage market is a very profitable area for both mortgage lenders and brokers, with mortgage intermediaries being paid higher commissions to sell sub prime products of between 1 to 1.5% and also often charging substantial fees on top of this.
34 intermediaries and 11 lenders were reviewed by the FSA, with 5 facing discipline, which could range from a ban on conducting business to a fine. Similar bad practices in the USA, have contributed to the worst housing slump since the 1930s, with defaults by sub prime mortgage holders at record levels.
The Association of Mortgage Intermediaries has said it will be setting up a working party in conjunction with the Council of Mortgage lenders to review the problem.
We have helped thousands of UK people obtain advice on Remortgages.
We Believe the Best Advice is 'Independent' Advic
- Remortgaging up by 7.19% last year
Figures have shown a large rise of 7.19% in remortgages taken out last year. This has come as a surprise to many with the interest.... - First time buyers offered 115% Mortgages
The Yorkshire has launched a mortgage called Mortgage +, which provides 115% loan to value. This is aimed at first time buyers who need more.... - Regulator expresses concern over lenders lending criteria
In recent speeches to the Building Societies Association and the Council of Mortgage Lenders, the Regulator (FSA) expressed concerns about the need for lenders to.... - Offset mortgages increase in popularity
According to the Council of Mortgage Lenders Offset mortgages are growing in popularity with around 7% of all new lending last year, which equates to....