C&G to enter non-conforming market

Ramesh Sharma

February 4, 2006

An industry source told MI, although no launch date had been set, with plans still being formulated, the lender would be moving into the non-conforming sector in 2006.

James Cotton, mortgage specialist at London & Country, was interested to see what angle C&G would take when announcing its future plans to enter into this specialist sector. “It will be interesting to discover what proposition it will offer. The near-prime market has grown considerably and I would imagine C&G will look at this part of the non-conforming sector first. There are a lot of borrowers with one or two blemishes on their record that fall just outside of the mainstream deals. These borrowers do not have a high lending risk so, rather than go through the market, I expect C&G to focus on these customers.”

Thomas Reeh, chief executive of blackandwhite.co.uk, said: “I am not really surprised because margins are being tightly squeezed in the prime sector. The line between prime and non-conforming is becoming increasingly hazy and many of the discounted non-conforming rates match those of prime rates. ”

He added that the UK non-conforming sector would continue to grow with more consumers getting into some level of financial trouble that will stop them from getting a prime deal. “I would be very surprised if entering into the non-conforming market was not on the agenda for a number of banks and building societies this year.”

C&G declined to comment.

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