Barclays has announced that its Firstplus division will no longer be taking on any new business, in a move that will further restrict the options available to hard up homeowners . The Firstplus unit provides homeowners with secondary loans by offering secured loans to those who already have a mortgage on their property . However, with house prices declining, and homeowners facing higher mortgage repayments, a secondary loan from Barclays’ Firstplus division may in fact become unsecured, as the value of both loans may exceed the value of the property.
That concern, combined with the greater food, energy and fuel costs faced by consumers, meaning they have less money, has prompted Barclays to safeguard themselves from consumers failing to meet loan repayments . The news is a blow to homeowners to use such secondary loans to consolidate all their loans into a single monthly payment, typically resulting in reduced repayments each month, thus freeing up more money.
As a result of the decision, an estimated 300 staff will lose their jobs, though Barclays have assured their employees that efforts will be made to relocate them within Barclays businesses.
Barclays Firstplus Division Stops Offering Loans
Wed, 09 Jul 2008
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