Research by NOP into the non-conforming sector found that 10% had their credit rating adversely affected by a divorce or separation and divorce rates in the non-conforming sector are far higher (18%) than those in the mainstream (7%). Therefore there is a natural correlation between rising divorce rates and the booming non-conforming sector.
According to Relate statistics, January is the busiest time for relationships to break down and lead to divorce as the tensions of the Christmas period take their toll on many couples. With divorce rates currently at their highest since 1996 it is therefore likely that this year will see further growth in the non-conforming sector as messy financial situations and the division of family homes affect the credit ratings of the many people affected.
Jeff Knight, Director of Marketing at GMAC-RFC commented: “We expect to see the non-conforming sector continue to boom in 2006. The fact that an unfortunate life event such as a divorce can be the only difference between a non-conforming borrower and a mainstream borrower shows just how small the gap between the two can be. The industry should therefore embrace this growing sector so that non-conforming borrowers can expect a good service and competitive options when visiting an intermediary.”
