Non-conforming comeback on the cards
The non-prime lending market is poised for a comeback over the next few years, according to a group of mortgage industry leaders.Deloitte asked a roundtable of lenders and brokers where they saw growth opportunities in the next three years. Refinancing and investors were seen as the high-growth segments.A return to growth in the non-prime lending market was ranked third, ahead of lending to self-managed superannuation funds.Deloitte financial service partner, Graham Mott, said: "We see strong growth in that segment as long as the funding market stays where it is."Mott said improved conditions in the wholesale funding market meant that non-bank lenders could achieve sustainable margin on their loans. "We believe there is opportunity for non-bank lenders to significantly reactivate the specialized lending market. This would be what was previously referred to as the near-prime, low doc and non-conforming markets."Typical borrowers for these products are often self-employed small business owners and others that lie outside the typical lending criteria of the large banks."