Thursday 13th December 2007
The "dream of home ownership" has turned into a nightmare for many sub-prime borrowers, Citizens Advice reveals.
Figures from the advisory service show that 11 per cent more mortgage-related calls have been made to its helplines since 2006, compared with statistics for the previous year.
And chief executive David Harker lays the blame on lenders for being too reckless in approving loans for consumers on the limit of affordability.
"The cavalier behaviour of some brokers and sub-prime lenders is seriously undermining home ownership and hitting the most vulnerable borrowers hardest," he comments.
But the lenders refute the claims made in the report, arguing that it takes an overly simplistic view of the issues faced by the market in the current climate.
Michael Coogan, director general of the Council of Mortgage Lenders, explains: "Citizens Advice has taken a sensationalist tone in this report, which risks throwing the baby out with the bathwater."
He proposes that sub-prime mortgages can provide an effective means for many people to "rehabilitate their finances".
Amid the growing unrest among sub-prime lenders and their critics, the Bank of England has announced united efforts among central banks to help ease the global crisis.
In collaboration with the Bank of Canada, Federal Reserve, Swiss National Bank and European Central Bank, the institution is to make an extra £8.5 billion in funds available to ease illiquidity problems for lenders.
"The Bank will review whether to make any changes to operations scheduled after January in the light of market conditions at the time," the Bank of England asserts in a statement.
©
Request FREE brochures from leading Real Estate Agents on properties abroad.
