Panorama: Mondays at 2030 BST on BBC One
Thank you for sending us your views on Sub-prime Suspect.
The debate has now closed and we have published a selection of your comments below.
Banning a firm from selling mortgages in the future sounds like a futile idea. The broker said it dismissed the individual adviser who was fraudulently helping borrowers to get mortgages that they couldn't afford. It's not the firm that's at fault, but the individual. Suggesting that a broker is no longer fit to sell mortgages because one of its sales people has committed criminal activity would be like saying that because a teacher was engaged in criminal activity, the local education authority was no longer fit to run schools to teach children.
Mark Ericsson, Radway Green, Crewe
I worked as a mortgage packager for a sub prime lender who specialised in right to buy & can tell you that the disclosures in this programme where spot on. Further my previous partner works for a sub prime lender who specialise in self cert & can tell you that the most unscrupulous of those in our society - drug dealers, tax evaders, are able to obtain mortgages with relative ease. Falsified utility bills are obtained where proof of residency is an issue. The FSA has had no interest in this gaping loophole, perhaps knowing that exposing the true extent of reckless lending would create instability in the market. Many sub prime brokers are making huge profits at the expense of the financially naive, or at worst laundering dirty money.
Ann, Bournemouth, Dorset
The poor pay more. No change there, then.
Peter, Wokingham, England
Once more everyone is to blame except the ignorant fools who have over extended themselves. Schools fail to teach people to think so they will have to learn the hard way. In the long run a society gets what it deserves ... police who will not take risks, firemen who will not climb ladders, nurses who will not feed patients, litigation wary teachers who will not organise school trips and so on and on.
Stuart Garrow, Cerne Abbas Dorset
I like your guest was sold a sub prime mortgage. At the time I didn't know it was called sub prime. I was also told to lie, about my occupation and the amount I earned. Sadly my home was eventually repossessed, I became very ill with depression and suicidal thoughts. I am now making a formal complaint with the Financial Ombudsman.
Simone Francis, Harrow, Middlesex
We are now paying the price for letting foreign banks in to the UK home mortgage market in the late 1980/90's. We have over the years destroyed through competition what was the envy of the world, namely the good old fashioned building society.
Terry Byatt, Sleaford
I work for one of the biggest Sub Prime lenders in the UK. The main problem for this market are the Sub Prime mortgages which are also self certified (no proof of income required by the Lender). When customers come back to borrow more for debt consolidation they confirm an income which at times can be 5/6 times of their mortgage. A lot of the problem for fraud prevention is the demand for speed. Brokers ask for mortgage offers in 24 hours, how can any lender be able to check the applicants thoroughly in this space of time. Also the way in which our mortgages are processed in on an automation basis - i.e. the system assesses the customer based on credit checks and an affordability model which checks the income and outgoings and see's what is left for the customer. 6/10 cases never get looked at by an underwriter as our system auto approves the loans!
Martin Brown, Cannock, Staffordshire
It is criminal offence to lie on a Mortgage Application form. If people applying for mortgages, sub prime or any other, lie, they should be investigated and prosecuted. Any misdeed by the mortgage advisor should be taken into account and he or she should be prosecuted, also.
Why do we have laws if we do not implement them. Ignorance is no excuse and the learning curve for all will improve with publicity given to the application of the law.
How unusual applying this law would be and how frightening that it should be so unusual.
Hugh C, South Manchester
Once again the BBC have portrayed clients as utterly innocent and stupid. These people know exactly what they are doing especially as this is getting them out of a hole, they wanted the expensive flat screen TV's with surround kits, holidays to Tenerife with Auntie Vera. THEY ARE NOT BLAMELESS. Irresponsible borrowing is as rife as irresponsible lending. I am a broker and have been for many years i have seen as many repossessions through prime as well as sub prime lenders. I will sleep well tonight after driving my Porsche home.
I'm an IFA I don't sell what you call "ninja loans" and as a result of your program I have lost 4 clients today as they assume I am trying to mis-sell them mortgages. Thanks for offering very unbalanced program that is damaging the reputation of honest hardworking IFA's. How about a program that shows how journalists have ruined innocent people livelihoods.
S Blake, Southampton Hampshire
Your programme was biased and one-sided. Whilst I have sympathy for anyone who is faced with eviction from their home, that sympathy is tempered by the fact, not brought out in your programme, that every so-called victim of this so-called scandal is actually guilty of fraud. They had all knowingly told lies about their financial situation in order to obtain a pecuniary advantage, and they are now suffering some of the consequences - a visit from the police would also be in order. The fact that they were incited to commit this crime by members of supposedly regulated professions, such as mortgage brokers and financial advisers is obviously a mitigating factor, and those guilty of incitement should certainly face legal penalties, but that does not absolve the "victims" from the responsibility for their own crimes. It is wholly wrong to blame the mortgage lenders if they are applying their 'income multiplier' rules correctly to inflated figures they receive in good faith from regulated advisers.
Peter J Ellis, Market Bosworth, Leicestershire
I know everyone has been saying how terrible it is for these lenders to allow vulnerable people to borrow far more than they can afford to pay back, but surely someone should be asking exactly how much responsibility people should have for their own actions. I don't think I could take out a mortgage for 16 times my salary without wondering how I was going to make the payments.
The programme was slightly sensationalist. Debt in the right hands can e a great economic liberator. I would also like to know where you can get a 100% buy-to-let mortgage as identified in the show as to my knowledge they don't exist.
I too watched this programme with interest since I did a lot of research work for a housing association around these sub-prime purchases for Right to Buy about 3 years ago. It doesn't surprise me one bit that the current wave of repossessions has started for two reasons. One is the avarice of brokers highlighted in the programme who prey on tenants to take up Right to Buy who are not financially in a position to buy a property and then actively push people into borrowing too much money. Secondly the greed reflex kicks in when tenants/customers are told they can buy "when its cheaper to buy than rent" without reading the small print. People on benefits were getting these mortgages and that is down to straight fraud on both sides and here I have no sympathy because that's a clear abuse of Right to Buy. Sadly they are now paying the price for this literally - however the double whammy is that the lack of social housing will mean that they find it incredibly difficult in most areas to get suitable accommodation - a boon to anyone engaged in buy to let!!!!!
Andrew Cave, Liverpool
As a mortgage adviser I am appalled by the producers inability to tackle some key issues surrounding mortgage advice. Firstly at no point in the programme was the term sub prime mortgage defined and portrayed this sector of mortgages as right to buy and self certification mortgages only, when the sector involves a lot more than this. Secondly, Panorama failed to offer any consumer advice regarding cold-calling mortgage advisers who are breaking FSA regulation with unsolicited approaches towards the consumers.
Thirdly, attacking mortgage lenders for offering self-certification mortgages is not a key issue here, it is the advice given by particular advisers who manipulate applications in order to pull the wool over lenders' eyes. My opinion - the FSA must increase regulatory visits to broker firms ensuring that the quality of advice is of a high standard and represents the true situation of the client and finally step in to ensure these rogue advisers are never allowed to arrange mortgages again. Panorama had a real opportunity to educate the public on this type of borrowing/selling but failed miserably this time opting to focus on ratings and finding the worst cases of rogue mis-selling.
I saw the programme and I was appalled, how can this happen?
When we applied for a mortgage we had to prove our income, supply pay slips, bank statements etc.
We do not live beyond our means, we have not had a credit card for over twenty years.
Roger Billam, Chesterfield, England.
We have been victims of sub prime lending for 6 years, we now have no equity left in our property, because of being sold re-mortgages that we were told would help us out. We would have liked to see some advice from yourselves for people in our situation.
Lisa Davies, Barnsley,uk
I have watched your programme with disgust and sadness .How could society allow this sub prime lending disgrace to evolve. I thought the day of the loan sharks and robbing the poor was a thing of the dark past.
Where is Gordon Brown the chancellor of ten years and now Prime Minster to allow this daylight ¿mugging of the vulnerable? Stand up and be counted Mr Brown, you where quick to step in and reassure Northern Rock customers when there was no need. These VICTIMS need saving NOW!
Yes STRONG language, but this is a serious situation that's about to unfold and could be an irreversible social disaster.
Gail Spencer, Anglesey
Take cover. Huge house price crash coming to UK, impact imminent. Well done Gordon.
Steve, South London
This was sub-prime journalism, sensationalism at its worst, badly researched, primarily based on anecdotal evidence, the stats that were used, i.e. 2006 repossession numbers were used on their own so there was no context....It lacked any coherence added no understanding at all to the problem
Chris, London, uk
It is a shame that this was not aired years ago before the problems occurred.
The FSA has allowed loans to be taken out at very high multiples of earnings which has led to the housing market bubble.
A much larger problem for the market as a whole will be the buy2let loans whereby loans have been granted on properties that do not give enough yield to cover the repayments let alone repairs and fees. Once these amateur landlords realise that there is no longer any chance of a raise in equity to cover their losses they will start to dump property onto the market. I believe this is what will crash the market, eclipsing the crash of 1989.
David Turton, Solihull, West Midlands
I agree with the vast majority of comments on the forum that have been published so far. Not surprising really as most of them have been posted by people like myself and my wife (honest mortgage professionals).
The problem with the majority of media coverage about this subject (as with many subjects these days) is that it is over-sensationalised, because that sells newspapers, or gets higher viewer ratings.
I would have expected more from an allegedly serious investigative programme with the pedigree of Panorama.
The truth is that the UK market is dissimilar in may ways from the US market, i.e., they don't lend 100% on adverse schemes, or lend on things with wheels (we call them caravans here) Whilst as with all industries, there are fraudsters operating, it is sad that Panorama chose to portray this as "widespread" and "rife"
Ultimately, people are responsible for themselves and the decisions they make. It is up to individual borrowers to make sure they can afford loans and/or credit that is offered.
It seems that one way where we are becoming very similar to the US is that there is no individual responsibility any longer - it is always someone else's fault.
Please don't tar the entire industry with this brush - it is full of excellent, honest, qualified professional advisors with their clients best interests at heart.
Maybe the moral of the story for people like the Bradshaws should be "don't take out mortgages from door to door salesmen"? I don't buy dishcloths door to door, so why would you risk your home with someone like that?
Philip Clark, Southend, England
As an Independent Financial Adviser I am appalled by the actions of the sales people in regard to the cases shown. It is no wonder that our industry gets a bad name from these people who clearly should not be authorised by the FSA, let alone employed by a mortgage broking company.
I feel very sorry for the "customers" of these people who are obviously vulnerable to the sales peoples' tactics, and suffer the severe consequences we've seen in the programme. I would agree that in the case where the customer is asked to put clearly false information there should be some blame on the customer, but the broker should never have been allowed/encouraged to do that in the first place.
There is no place for dodgy financial advisers but properly authorised and regulated advisers will offer a much better service than this.
Samuel Gee, Bristol, UK
Just watched the Panorama report on the Sub-Prime market. I felt compelled to post some of my thoughts and experiences. I have worked for a large broker and have dealt with Sub Prime customers myself. The people who were featured on Panorama are not a true representative of the sub-prime borrower. These people were the worst case scenario of mis-sold mortgages. Whilst I agree whole heartedly that the mortgage advisors that have callously duped these people should be named and shamed the sub-prime or adverse loan mortgage/loan industry plays a massive part in other peoples lives. As an example most high street or prime lenders will take into account 5/6 years previous credit history. Lets say that you or I had a ccj for a debt that we got into 3 years ago and now want to buy a house. We may have got into this debt when we were younger or we may have been ill and unable to work. Do you think that a high street lender will help you at fantastic mortgage rates? Of course not.
The only way you will get a mortgage will be from a sub-prime lender at a higher rate. The right-to-buy scheme that Panorama seemed to highlight as the route of all evil has actually helped thousands of people purchase their own home at up to 66% under market value. Surely this helps the economy and people afford their own homes that otherwise wouldnt/couldnt?! As for the NINJA loans that Panorama has shown...I'm sorry but I think that there is probably less that 0.01% of these around.
Adam Goble, Great Yarmouth, Norfolk. England
I work as a debt adviser for CAB and deal with this every day. I also do duty representation in County Court on mortgage repossession days. You estimated 70% of repo cases were down to sub prime lenders. I reckon I deal with about 80% - 90% sub prime lender victims on the court scheme. Well done for naming and shaming some of these companies and the FSA.
Craig Bainbridge, Stanley, Co Durham UK
Whilst acknowledging the naivety of many who walk into this trap there is one area that concerns me even more and that is the deliberate lending to council house tenants to purchase knowing full well they can cash in with equity on the beneficial cost of purchase on taking over property at the same time as occupiers are put back on the council list after eviction
/Bob Reeve, Leighton Buzzard
Watched program last night with interest as I work for a large mortgage packaging firm, and there is a way to help stop this mis-selling fairly easily, and it is mainly based on self certifying your income. If it was cross-related to inland revenue it would stop people stating they were earning £50k to get mortgage, when in fact they are earning less, and the tax man could then investigate why they are not declaring all there income? It would slow the market down and also reduce prices
Alan Gledhill, Stafford United Kingdom
The City will also want to carefully watch the bankruptcy and IVA statistics alongside repossessions generally, since as they all increase, as they appear to be at present, they will leave entirely unsupported losses for the sub-prime market.
Mike Reeves, Romford, UK
I have a mortgage with Platform - I have had for five years. My interest at the start was 4%. At present it is 11%. I am at the moment doing a remortgage but sympathise with others not as fortunate to be able to remortgage. These companies are nothing more than loan sharks
s Giles, Warwickshire
Thank you to the BBC for finally highlighting this huge problem with sub-prime and mis-selling in West Thamesmead. For so long it has fallen on deaf ears.
I am involved in a similar situation as some of the mortgage holders on the programme. My mortgage is 10.2% and pay £1,028.00 per month for a 2 bedroom flat that I would rented for £650 per month. My partner is expecting our second child, the first being 3 years of age, and myself studying full time at postgraduate level which I was forced to do to try and enhance opportunities of having a professional job.
I cannot switch mortgages because they would charge me £5,500.00 and other banks/building societies won't help me switch saying my credit score is not good enough, or I work for an agency.
I need help as well!!!!
Gardie, Bournemouth, England
I am very disappointed in the FSA. I believed the FSA were a trustworthy agency. It seems that the ordinary person cannot trust this agency to close the loopholes that fraudsters rely on to break the law for financial gain. This country is very disappointing and has failed to protect vulnerable people who are misled into following the dream of home ownership. Meanwhile, the honest working person who pays their way in life has to eventually pick up the bill as powerful financial institutions refuse to take responsibility and pay for their own losses. It is just another 'scam' to them.
Fiona Lynas, Edinburgh Midlothian
Interesting programme, but only the tip of the iceberg... in my role as a (local government) money adviser, I see clients with similar stories on a daily basis.
What Panorama did not cover was: the number of owner occupiers with substantial credit debt, who are re-mortgaging (often with a sub prime lender) & consolidating the debt.
Sub prime (& mainstream) access to credit. The majority of my clients are "Ninjas", whom 10 years or so ago would have had a few thousand pounds in debts. These days, we are seeing people, who are long term dependant on benefits with personal credit debt of £15,000 or more.
Mark N, Tynemouth
I just want to thank you for covering this story. In an age when government - those who are supposed to protect its people - are failing us and allowing big business (whose only interest is to make as big a profit margin as possible) to ride roughshod over the dreams and aspirations of ordinary people, it is at least good that our tax money is going to an institution that is redressing the balance somewhat. Knowledge is power, but we need to be able to access this knowledge in a way that is easy for us to understand.... which is not always the case.
Capitalism is making some of us more materially comfortable, but is also slowly killing our collective 'humanity'. Maybe programmes like yours can stop this before it is too late .. here's hoping....
Nahid Aslam, Edinburgh
I was not surprised by your comments during the program last night. My firm has not received a regulatory visit from the FSA Ltd since 1999!! We are required to submit every 6 months financial statements that are so complex my accountant fails to understand how to complete, so we just make them up as we go along.
We have twice reported wrong practice to The FSA Ltd and even had our MP Sir Patrick Cormack write to them only to have the complaint finally dealt with some 2 years later!!
Julian Pruggmayer, Wolverhampton, West Midlands
As a result of the sub prime activities and high rates of repossessions in the surrounding area our property (which is not on sub prime money)is in negative equity by £20,000. Clearly we have the lenders within the sub prime market and the FSA to thank for that. How much more are we to lose I wonder and how many areas will find property prices plummeting due to the sub prime lending around them?
Julie, West Thamesmead
I was given a mortgage based on my earnings, including my tax credits. My mortgage was for 20 years, my son at the time was 13. 5 years down the line, my tax credits - my single person council tax - my family allowance - all stopped when my son turned 18, and left full time education. I have found it impossible to find a job that actually makes up the lost income, salaries here in the north are not high. I now work 45 hours a week, and am constantly struggling to keep my self out of debt and pay the bills. I should not of been given a mortgage based on an income which included benefits that were not permanent. This was never mentioned to me, I was eager to get onto the property ladder and stop paying rent to someone else, but I feel I was encouraged to commit to this debt without being properly informed.
Sarah, Skipton - North Yorkshire
I watched your programme regarding sub prime mortgage lending and was disappointed at the unbalanced view you presented.
For one, Right to Buy clients receive a huge discount on their property when the have lived in their council house the length of time the people featured in your programme had. You failed to point out that they probably borrowed far more than they needed in order to buy their property.
The Key Facts Illustration that was shown on the programme (for a brief second) clearly stated that the client's monthly payments would increase - this document would have been issued to the clients before they were committed to anything!
It is totally unsurprising that the relatively small proportion of sub prime mortgages make up the majority of repossessions, that is the nature of the beast. It is higher risk lending. You have not mentioned one of the thousands of customers that benefit from a sub prime mortgage, who know they have the ability to pay but who don't fit the High street banks' lending criteria. Sub prime lending covers a very large range of credit profiles, from clients that have missed one or two credit card payments, to clients that are on the verge of repossession. I would be interested to know what percentage of clients who obtained a sub prime mortgage in the last 12 months that have since been repossessed - but I would guess that the small percentage that would give you would not have fitted in well with the biased point your programme was aiming to make.
The section of the programme relating to the fraudulent overvaluing of the flats in London is nothing to do with sub prime lending - and there is no way that Alliance and Leicester would offer the applicant a 100% LTV mortgage for 10 times his salary.
Finally, regarding the same applicant, the supposed buy to let mortgage that he obtained from Platform for 100% of the purchase price - this is simply factually incorrect. Platform do not offer ANY 100% lending, and there are no lenders in the UK that offer a 100% mortgage for a buy to let property.
Once again Panorama gives us a doom and gloom picture and really provided us with a very unbalanced view of this market. NINJA mortgages as they are known, I can assure you are virtually non-existent, I should know as I am a mortgage consultant and have been for over 30 years.
Of course there are problems, but the vast majority of Sub-Prime mortgages have been recommended and sold by honest professional consultants such as myself to clients who have an impaired credit history but can afford to take out the mortgage offered. I have never and would never tell a client to lie on an application form and neither would the vast majority of mortgage professionals. Clearly there are unscrupulous brokers out there who do deal with this desperate end of the market but they are very few and far between. I personally do not know of any major lender who will lend 100% on a sub prime case, there are none on the panel my company uses. Your documentary made it seem that this sort of lending was rife, which is far from the truth. Shame on you Panorama.
Peter Eckersley, Alnwick UK
I have always had the greatest respect for Panorama and it's investigative journalism but your programme on the sub prime industry has cast a huge doubt over that trust, and I will watch in the future with a larger degree of scepticism. The report was incredibly biased and chose to take a very one sided view. Do people not take responsibility for their actions any more? Of course the majority of repossessions are in the sub prime sector. That is to be expected as that sector lends in the riskiest part of the market. The man lent £500,000 on £25,000 income? Half of that was on a BTL which is underwritten on anticipated rental income assessed by qualified valuers. That was completely ignored. The block of flats where the majority were repossessed was the result of a fraud and the lenders lost money. They would not chose to be the subject of a fraud any more than the borrowers and hard lessons have been learned.
Of course there are a few problem brokers and some lenders have been too bullish in times of rising house prices, but individuals also have a responsibility to make sure they can repay any debt they take on.
Finally. Sub prime lenders also help many people who would not be able to borrow from the high street to consolidate debt which assists them to recover their position and build a better credit rating, so enabling them to go back to the high street in the future. Sub Prime lenders also provide a means for people who have had temporary financial problems caused, for example, by a divorce, or death of a partner, to become or remain as an owner.
Don't forget, the majority of sub prime mortgages run like any other type of mortgage till the customer moves and or re mortgages.
Kare Edwards, Brighton, Sussex
I was shocked at how alarmist your programme was. You never gave any advice to the public how they could take steps to ensure they received best advice.
There is currently over £1.3 trillion of borrowing in the UK, this is borrowing other than secured lending (mortgages). My company save many people from money problems by using the equity in their property to refinance there unaffordable expensive borrowing in a mortgage.
A basic problem is that the cheapest form of borrowing (A mortgage) is the most regulated. Where more expensive borrowing such as credit cards, secured loans and loans are not regulated at all.
By not giving a balanced view you may have scared people from seeking help from a fully qualified mortgage adviser in a good brokerage that use the whole of market and are directly authorised by the FSA.
Martin Canton, Norwich, Norfolk
The programme failed to identify that Sub Prime definition as used in USA is not Sub Prime as used UK. US definition is much broader & if applied to UK it will take 8% mortgages as sub prime in UK to 12-13%!!
Ashish Pande, London, UK
Surely the fraudulent activity committed by these mortgage brokers cannot be legal. In my opinion this is organised crime and should be harshly dealt with. Not only is it detrimental to the lives of the naïve folk who took out these mortgages, but it also puts the economy and financial system in jeopardy! I can understand the FSA not being able to closely scrutinise all mortgage brokers, that would require huge resources, but I think they should at least make a strong example here. That would warn off other organisations thinking about attempting anything like this in the future.
Ivan Sproule, Edinburgh