The collapse of UK mortgage bridge lender Market Financial Solutions has caused chaos across specialist lending. Mortgages are the heart of the securitised products business, and if you can’t trust mortgages, what can you rely on?

9fin broke the news of double pledging and shortfall in collateral found under its warehouse facilities. The fraud allegations are reminiscent of the recent cases of First Brands and Tricolor in the US that have shaken the private asset-based lending industry.

Lots of well-known firms have been caught on the wrong side of MFS — the likes of Barclays, Atlas SP and Castlelake — and it was a close shave for other lenders.

In this episode of Distressed Diaries, host and senior reporter Bianca Boorer sits down with 9fin asset-based finance editor Owen Sanderson and Kawai Chung, mortgage market veteran and CEO of UK lender Folk2Folk, to dig into the drama, assess the impact, and consider how the ‘safest’ form of lending might have ended up in double-pledging.

Most importantly, we look at what could be done differently in future — as borrowers scramble to prove their credentials and lenders look over their books, what’s the future of asset-based finance in Europe?