Credit Crunch Lenders Criticised

At a recent Citizens Advice - Finance and Leasing Association forum at the Labour party conference, John McFall, the Treasury select committee chairman, has warned lenders over offering mortgages of 125 per cent and six-times salary mortgages.  

Mr McFall has said that he has challenged lenders on these practices and has not received a satisfactory response.  Lenders claim that that they cannot afford not to offer these products, for fear of losing the business.  

He has also claimed to have written to the Chancellor Alistair Darling and Treasury Economic Secretary Kitty Ussher, expressing his opinion about the unregulated schemes of buying a struggling borrowers home and renting it back to them.  Sometime the rent for these schemes is excessively high.  

Our view

The current so-called ‘credit crunch’ has been caused by irresponsible lending.  We suggest it is the regulator who needs to haul in both lenders and mortgage advisers alike to protect the public from themselves.

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