Current market conditions have left many homeowners struggling to meet repyaments and having their homes repossessed - undoubtedly non-conforming borrowers are some of the hardest hit by the current 'credit crunch'.
Focussing on three such borrowers, Panorama investigated exactly how they had come to fall foul of such mis-selling. However the programme has caused the industry to hit back at what Peter Williams, executive director of IMLA, deems "unduly sensationalist content".
Williams said: "IMLA and its members fully support the regulatory requirements of the FSA and in particular the duty to treat customers fairly, and we do not condone any mis-selling of mortgages. However, we note that the programme was largely based on the cases of just three somewhat atypical customers and do not consider the content to be representative of the market as a whole.
"We were disturbed to note that in the programme there were examples of borrowers who knowingly signed mortgage applications containing inaccurate information and we do hope the programme has reinforced the message that this is fraud and not, as suggested by one customer, an acceptable 'white lie'."
"The programme produced figures for the number of possession hearings over the past three months, but it should be understood that only a proportion of such hearings do actually lead to the lender taking possession of the property. Indeed as the programme showed, one lender has already agreed a payment plan with the borrower in order to prevent this.
"The estimate that 70 per cent of possessions relate to non-conforming is, we believe, exaggerated although we accept that this is a higher risk sector where the rate of repossession is understandably higher. Panorama quoted the CML figures that 14,000 properties were taken into possession during the first half of 2007, an increase over the previous six months (11,900). While any increase in the number of people losing their homes is regrettable, these figures do need to be seen in the context of the overall size of the UK mortgage market. With over 11.8 million mortgages outstanding, this represents a tiny proportion of the total - just 0.12 per cent.”
Williams concluded: "There is no evidence to suggest the non-conforming market is facing the major meltdown suggested by Christopher Wood or the programme makers. The reality is there is real and legitimate market for responsible non-conforming lending and borrowing, and this is what IMLA members are focussed upon."
