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Kensington comes under attack from Labour MP

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  • 01/04/2000
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Kensington Mortgage Company (KMC) was hauled over the coals earlier this month after Labour backbenc...

Kensington Mortgage Company (KMC) was hauled over the coals earlier this month after Labour backbencher Barry Sheerman tabled eight questions to the Treasury on the activities of the sub-prime lender.

The MP for Huddersfield took the action after a former manager with Abbey National brought the plight of two of his constituents to his attention.

Brenda and Paul Langshaw, of Bradley, near Huddersfield, claim charges for arrears and legal costs applied by KMC were unfair. If arrears payments are missed, Kensington has a court order that enables it to repossess the house.

Sheerman said: “They were a nice couple who managed to fall into the hands of a very unscrupulous group.”

Meanwhile, Florida-based Ocwen Financial Corporation (OFC), which owns a third of the group, has filed its 1999 fourth quarter results attributing a $3.1m loss in profits to equity it had invested in KMC.

Results for the previous year attribute a $2.8m loss in profits for the same reason. Both the results and the Labour MPs intervention will have come as a blow to KMC, which is planning to float in September.

It has retained the services of City law firm Link Laters & Alliance, specialists in bringing companies to the stock market.

KMC’s chairman Martin Finegold refused to comment directly on the Langshaws’ case or Kensington’s plans for flotation.

But he said: “Our business is profitable and I do not know anyone who thinks otherwise. Some people say OFC may be playing financial games to minimise its taxes.”

In a personal letter to Barry Sheerman MP, Finegold said: “The Langshaws had been informed of the amount and that it would be collected by direct debit. The charges that were levied were made clear at the outset.”

But Sheerman said that he thought KMC’s official response came “a little too late in the day”.

“They only responded when I got angry with the situation,” he said. “I want to look them in the eye and see what they have to say for themselves and inform them that the changes that are coming about through the FSA are going to restrict what these fringe lenders can do.”

A statement issued by KMC said: “We fully subscribe to the CML’s Mortgage Code and consider that we have fulfilled our obligations under it in our dealings with Mr and Mrs Langshaw.”

Melanie Johnson, economic secretary to the Treasury, said: “It will be for the FSA to decide whether to initiate specific investigations into particular areas or firms in the mortgage market, once it has the powers to do so.”

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