From This is Money:
In some cases, tens of thousands of pounds are being paid off to give customers a better chance of finding an alternative lender willing to take them on.
The offer is being made by some of Britain’s biggest mortgage firms who are willing to take a hit of as much as £25,000 to get the loans off their balance sheets to see them through the credit crunch.
They gave out billions of pounds of high risk sub-prime and buy-to-let loans during the housing boom but now want capital quickly, resulting in the extraordinary offer.
But for those mortgage-holders being targeted by the struggling lenders, it offers the opportunity to reduce their home loan payments drastically.
Those being contacted initially are borrowers whose home equity has been wiped out by falling house prices, making them an unattractive proposition for other lenders. One lender claimed its initial pilot scheme had chosen mainstream customers who have not missed mortgage repayments, making it more likely that a r…