Victoria Mortgages Goes Into Administration

Wed, 12 Sep 2007

Sub-prime mortgage lender Victoria Mortgages has become the first victim of the current US sub-prime crisis, as it announced on Monday it had gone into administration and is no longer funding any new business .

"We have gone into administration. It is fair to say our funding line has been removed," said Simon Read, head of business development at Victoria Mortgages .

The company, backed by US venture capital group Venturion Capital, described itself as a specialist in the non-conforming mortgage and provided loans to borrowers with poor credit histories.

Existing borrowers are unlikely to be affected by the company’s difficulties, as most of its loans have already been sold on to investors, although Read confirmed that Victoria will not be able to complete outstanding mortgage offers from up to 381 borrowers .

According to the Financial Services Authority, Victoria was one of the small players active in the British sub-prime mortgage market (held less than a tenth of one per cent of the overall UK mortgage lending market). It originated mortgages before collecting them and selling them on to financial institutions.

The turmoil on the financial markets has prompted other sub-prime specialists, such as GMAC, Mortgages Plc and Kensington Mortgages to increase their rates .
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