Finance house pulls plug on high-risk mortgages

Finance house Irish Life & Permanent (IL&P) has effectively pulled the plug on one of its higher risk mortgage lending wings, it was confirmed today.

Springboard Mortgages has paid out about €500m in what it called the ’near prime’ market in the last two-and-a-half years, mostly dealing with buyers already rejected by the bigger banks.

The business will stop lending money to househunters by the end of June.

Shane O’Sullivan, Springboard chief executive, said the decision to stop lending reflected Irish Life’s focus on more mainstream lending.

“The Springboard business model worked very effectively and profitably but in a market where funding has become more expensive and more scarce, the group has made the decision to concentrate its mortgage lending activities on its traditional core market and we respect that,” he said.

It is understood Irish Life are concentrating on business generated through its traditional mortgage lending division, permanent tsb.

No more applications for lending will be accepted after the close of business today while no more loans will be paid after June 30.

Mr O’Sullivan said the stop on lending will not have any impact on existing customers.

Springboard is a wholly owned subsidiary of Irish Life & Permanent, established in December 2006 as a joint venture with US investment giant Merrill Lynch. It took sole ownership in June 2008 when Merrill Lynch left the specialist lending market.