Mortgage broker firm John Charcol could be facing an uncertain future according to its auditors, as its liabilities by far outweigh its total assets. John Charcol has enjoyed success over the year, and even now continues to insist that there are no problems, or at least not ones that would hinder its operations. However, according to recent reports the firm has to make a decision with regards to whether it will be refinancing its operations or looking at takeover bids.
The global credit crunch has affected many firms in the mortgage sector over recent months, and this includes banks, smaller building societies, and other mortgage lenders. Lenders have found it difficult to secured finance to fund their mortgage lending operations.
It was originally thought that building societies had escaped the credit crunch because their mortgage lending is financed mainly from savers’ deposits, but even building societies have found that the credit crunch has had a profound effect.
The recent report on John Charcol suggests that its liabilities are over half a million pounds more than its total assets.
The company has deferred loans of over £800,000. However, the mortgage broker insists that it is not in trouble. The loan stock had been due for repayment in the summer of last year, and there is now a set deadline of next month, with the firm refusing to comment with regards to whether this deadline will be met.
However, officials from John Charcol did state that business was doing well as a result of the credit crunch, as more people were using mortgage brokers in the current financial climate as a result of the lending criteria from mortgage lenders becoming so tight.
One official said: “Customers are finding it more difficult to get the rates they want and turning to well-known brokers for advice.”
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