U.K. mortgage lenders are offering loans to "almost prime" and "complex prime" borrowers with "minor historic credit issues" who may have experienced financial "blips." They do not use the word subprime.
Three years after defaults on U.S. subprime mortgages sparked the worst financial crisis in almost 80 years, General Electric Co.'s GE Money unit and Investec PLC's Kensington division are once again lending to British customers rejected by mainstream banks.
This time, they say, they are offering less money to clients with better credit histories.
" 'Subprime' sends messages out that people are lending money to individuals who can't repay it," said Gerry Bell, the marketing director for GE Money's U.K. mortgage unit. "Our customers have clear track records," though some may have had "minor credit blips," he said.
The new loans are less risky, he said. "It's very different from where we were in 2007."