The recession was to a large extent caused by the very lax laid back

underwriting in the financial sectors which consists of all types of

loans both private and commercial, remortgages, mortgages , etc.

The majority of the civilized world was involved in this reckless free

for all lending, but America was most likely the major culprit

with the UK a close second.

Many senior officials at banks, building societies and other lending

institutions liberally advanced loans of all kinds, including secured loans to homeowners as

well as mortgages and remortgages that they must

have known the borrowers could never afford to rapay , and the same

was true with business loans.

Business loans were advanced, especially in the property sector, to

developers and buy to let entrepreneurs many of whom would not have

been considered for any form of loan at all in previous decades.

The lenders were not concerned so much about the clients ability to pay

back the funds borrowed or by the future of their own companies which

employed them as they were about their own personal bonuses.

The main aspect that was totally wrong was the acceptance of self

declarations of income without asking for any proof of genuine

earnings, and it was inevitable that the finance sector lending money

was going to collapse and collapse it did and with a

vengeance.

Inevitably secured loans, remortgages and mortgages fell as a result

with secured loans falling by more than 80% of their 2006 level, and

suddenly secured loan lender after secured lender ceased trading, as did

the vast majority of secured loan brokers including major homeowner loans brokers who had been

trading with success for years.

Mortgage lending suffered as people choose to stay on in their current

homes as they had no confidence in their employment status , and

mortgages were further affected by the tightening up of loan to value

especially as regards first time buyers who were required to put down at

least 25% of the property value as a deposit and not many were in this

sort of comfortable financial position.

Remortgages which used to be such a popular way for homeowners to move

from one mortgage provider to another to obtain a better interest rate

or to raise funds for almost any purpose declined.

Again the decline in the remortgage sector was in part due to the

slump in property prices meaning that low remortgage rates were no

longer available to as many as before, as low mortgage and remortgage

rates depend largely on the equity on a property, and also declined due

to the lack of confidence in the economy.

The financial situation did lead to one financial sector seeing an

increase in business and this was in the debt advice and debt

management sector with Citizens Advice which is of course a free debt

advice service struggling to cope with the volume of people seeking

debt solutions.

Now that the recession is over it is to be wondered exactly what will

now happen in the fields of secured loans, remortgages and mortgages.