Bob Sturges, head of communications at Money Partners, stated that the current state of anxiety in the financial markets would put off investors, making it difficult for secured loans lenders to access funding.
He explained: “While the markets are worried, they understand mortgages; they don’t understand second charges. Because of the general state of nervousness, investors have woken up to the fact they are more nervous about secured loans than mortgages. With the relative size of the market, one or two lenders withdraw and it has a dramatic effect. Brokers have woken up to that.”
Sturges stated that while he did not see any fundamental changes in the market to warrant the nervousness being displayed, secured loan lenders would be under increasing pressure to rein back their criteria.
His comments followed the news that Kensington has closed its secured lending arm until the financial markets recover, while Lehman Brothers also shut down its secured lender operation, Southern Pacific Personal Loans.
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