KEY POINTS:
London - British subprime specialist Victoria Mortgages became the latest victim of the credit crisis yesterday as the lender said it had gone into administration and was no longer funding new loans, citing escalating costs.
Like many other mortgage lenders in Britain's "adverse credit" sector, Victoria depended on the wholesale market to fund mortgages, but recent turmoil has dried up liquidity there, pushing up the cost of borrowing for lenders like Victoria.
The firm, which industry experts say is the first British lender to go into administration in the current crisis, is one of the smaller players in Britain's niche subprime mortgage market. Officials at Victoria did not comment on the size of its share of the subprime market or loan book yesterday.
The Financial Services Authority, which put Victoria's share of the British mortgage market at 0.06 per cent, said KPMG have been appointed as administrators for the wholesale lender.
The regulator said GMAC-RFC, Britain's largest subprime mortgage lender, had offered to review potential completions for home purchase deals due in the coming days, with a view to offering borrowers a mortgage loan.
Backed by US venture capital group Venturion Capital, Victoria was launched just over two years ago, offering a range of products from self-certified mortgages for "prime" borrowers to mortgages for borrowers with "heavy adverse" credit.
- Reuters / NZP
