Some struggling lenders have offered to write off a considerable chunk of customers’ home loans if they move to a rival bank . Eager to shore up their portfolios and balance debt, some lenders have written off tens of thousands of pounds to improve the chances of borrowers finding an alternative lender. The extraordinary offer follows overzealous lending from the mortgage companies during the housing boom. Such lenders are now so eager to secure capital that they are willing to write off segments of the sub-prime and buy-to-let loans .
The lenders’ plight will help some of the most troubled borrowers, with lenders initially contacting borrowers whose home equity has been diminished by falling house prices . However, banks are still eager to find mainstream customers who haven’t missed any loan repayments as they are most likely to appeal to other lenders.
GMAC is amongst the lenders making the offers, after it approved nearly £10 billion of home loans in 2007. Morgan Stanley owned Advantage is another such lender, with reports claiming Advantage agreed to cut one borrowers mortgage from £88,000 to £63,000. The cut is believed to have been made after the borrower was unsuccessful in securing a remortgage with a new bank.
Lenders Writing Off Home Loan Debt
Lenders Writing Off Home Loan Debt
Mon, 22 Jun 2009
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