Francis Maude: Toxic Pusher

Do you know those TV adverts for getting a really big loan to pay off all the other loans, with blue water and pretty girls, and very small print? Debt consolidation. That's Francis Maude. That's his job.

One of Prestbury's appointed representatives, Clear Mortgages, encouraged customers to "mortgage up to the hilt in Spain" on Spain4You.co.uk, to avoid inheritance tax duties

Unfortunately, they always get a pass 'cos of cyburbia interwub thingy, or whatever it is that keeps national journalists from doing a modicum of research. Here is Maude speaking.

"The sector has been regulated for the past few years and Prestbury has been subject to regulation by the FSA, and our brokers as well. The business got into some serious difficulties, which came from brokers and mortgages, the housing market collapsed and basically so did the business.

"When you talk about sub-prime, a lot of what would have been done [in the Prestbury network] was not frankly [sub-prime] mortgages, and would have been self-employed people rather than people with low credit," he said.

So, to start with, it's the world recession if you're a Tory, it's the Hayekian truth of Austrian economics, cap in hand to the IMF, a form of Gestapo very humanely directed in the first instance, etc etc, if you aren't. Not my fault, guv. Moving on, though, what Maude is describing is what the Americans, who invented them, call an Alt-A mortgage.

The original idea was that these would be offered to people who were broadly creditworthy, but whose income was volatile because they were self-employed. However, this became a cover for dodgy mortgage brokers to push out loans to anyone who could fill in the form, in order to make their numbers. As the whole point was that it didn't need so much documentation, a huge amount of them were accepted by the banks and sold on without any real scrutiny. As far back as 2005, if you read the right blogs, it was clear they were going just the same way as subprime.

Maude's loan operation went belly up, but then, what do you expect from the man who failed steadily upwards since 1997?