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The Power Hour


MBE 2012: Power Hour: Are we nearly there yet


Near prime is a growing sector of borrowers but lender appetite is still subdued. Our panel of experts debate how near the market is to helping these people back on their feet


WITH “NEAR PRIME” “COMPLEX PRIME” AND “ALMOST PRIME” FLOATING ABOUT THE MARKET, WHAT BORROWERS ARE WE ACTUALLY TALKING ABOUT? Ivan Gould: There is a Financial Services Authority definition of credit impaired so you can determine who is absolutely credit impaired and obviously there’s the rest. I think it’s almost anyone with a blot on their credit history or people with difficult multiple income sources and difficult cases. Lorenzo Satchell: My definition would be someone who doesn’t fit the high street’s credit worthiness in regards to their automated systems. I would also look at irregular payment patterns, non-conforming that people who work in complex sectors of the market place as


well as their status and credit profile. IG: Relationship breakdown is quite a big chunk as well. Alan Cleary: There’re lots of things unfortunately. Everyone who doesn’t fit what goes through the traditional high street lenders will sort of fit this box of complex cases. So it can be about getting people who want to consolidate debts. The high street will only allow certain amounts for certain purposes. Certainly when you look at our book, 78% of them have no adverse, they just don’t fit the current restrictions that exist on the high street and that’s driven by funding issues and other issues that everyone has to grapple with. There’s not enough money to go around so you have to pick the type of customers you wish to lend to and that means that some people don’t fit the traditional mould.


LS: I would have to agree with respect to our book. Around 90% of our customers don’t have CCJs or arrears. Gev Lynott: Coming from a non-secured consumer credit background stance people will fall into sub-prime or deep adverse and then you see if you can rehabilitate them and put them close to prime at near prime until they can finally become prime again. That to me is helping people up the ladder. We don’t want to go into sub-prime because it’s not prudent enough for a building society, obviously some do through subsidiaries, but certainly people who show willingness and rehabilitation of adverse history, that puts them closer to near prime heading into the right direction.


IS THERE A DIFFERENCE BETWEEN NEAR PRIME,


34 MORTGAGE INTRODUCER MARCH 2012


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