Mortgage firm in administration following US crisis

Victoria Mortgages, which lends money to people with adverse credit histories as well as the self-employed, has been placed into administration following the turmoil in the sub-prime market.

A spokesperson for Victoria Mortgages said it has had its funding removed and they have gone into administration. The group is striving to find lenders to take on mortgages it has in its pipeline. The group is now unable to advance funds to people who have had loans approved, meaning those purchasing homes will be unable to complete on them.

However, GMAC-RFC the UK’s 10th largest lender, has been approached by the Financial Services Authority (FSA) and is willing to help some borrowers. GMAC-RFC said it is working closely with FSA and the administrators to ensure completions will take place over the next few days as planned.

News of the administration comes shortly after Kensington Mortgages, the specialist lender, announced that it is temporarily withdrawing from the mortgage market. Kensington also lends to people with impaired credit histories and has already reduced loan amounts and raised interest rates for a number of new customers.

Rumours are that other lenders are moving out of the uncertain interest-only mortgage market. Fears have been raised about the growing amount of people signing up for an interest-only mortgage but do not have an investment plan to repay the loan when it comes to the end of its term.

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