Matt Grayson, PR manager at BM Solutions, said GMAC is not lending in the spirit of ‘Treating Customers Fairly’ (TCF) by looking at clients who have accumulated arrears in the last three months, saying it is not a policy BM would adopt.
He explained: “If you do not give the client the opportunity to stabilise their finances, it is a downward spiral. If they are given no breathing space and you accept arrears in the last three months, how is this responsible lending?”
But Jeff Knight, director of marketing at GMAC-RFC, retorted: “We don’t do this on near-prime deals. We do it on heavy adverse as the LTVs are slightly different and we are pricing the risk. This is just a smoke screen from BM to cover a weakness in its own product range.
“We are in line with TCF. Effectively, we are actually helping rehabilitate the credit ratings of these customers. We are meeting demand. This is why we’re number one in this sector.”
Mike Pendergast, IFA at Zen Financial Services, said: “It depends on the reason for the arrears but clients should make every effort to keep mortgage payments up-to-date. There are a number of cases where there are genuine reasons for arrears and in this sense it must be good for GMAC as not a lot of lenders will do business with clients like this.”
Sheridan Bradley, mortgage adviser at Lodemead, did not believe GMAC was promoting irresponsible lending. She said: “So many people have a credit problem now and as long as GMAC has its own checks in place then I think it is fine to have arrears in the last three months.”
