Speaking at yesterday's Mortgage Business Expo Manchester 2012, Wriglesworth suggested that all lending activity prior to the credit crunch was “justified including sub-prime” and the fault for the crunch and the liquidity crisis lay at the feet of US sub-prime lenders.
Wriglesworth said pent-up demand in the first-time buyer market was out there “and if they could get hold of a mortgage then they would”.
He said: “Lenders can’t lend in the right way to get the market going. Unless 100% mortgages and sub-prime comes back then you’re not going to see a healthy market. There is nothing wrong with 100% or cashback mortgages as long as lenders price for risk.”
He also urged for the return of the securitisation markets in order to facilitate a market improvement.
And he criticised the capital adequacy demands facing lenders and said the new round of requirements was “Basel III meets Godzilla”.
There was also little sympathy for the Financial Services Authority either.
Wriglesworth said: “The FSA is stifling the ability of lenders to offer mortgages to those that want them. It is a total over-reaction. What’s wrong with giving someone who is riskier an 8% mortgage [rate]? The FSA are not allowing lenders to do this because they don’t trust them.”
He also questioned the motives for brokers selling short-term products.
He added: “Those selling two-year/short-term discounted products are mis-selling because you’re exposing borrowers to interest rate fluctuation in two years time.”
Finally, he did see some positives in the mortgage market: “There is virtue in the fact that we are stable and we’re at the bottom of the market.”
