WE all know the ads. They usually appear on daytime TV . . . over and over again in the cheapest slots on the most obscure satellite channels.

A couple stare grimly at a bundle of household bills.

They can't cope. The colour scheme is saturated with greys.

They read an ad, look hopeful and make a phone call.

Suddenly they are smiling again as all their problems magically disappear. All the colours splash back onscreen.

They jump up and down with delight. A cool new car appears in the driveway! The overgrown garden suddenly becomes an earthly paradise!

The dowdy decor is transformed with palatial grandeur! All they had to do was pick up a phone and talk to the lovely, friendly young people who simply can't wait to sort out all their problems in a jiffy.

The chances are they were talking to a sub-prime lender.

You know, the ones whose image is not quite so wonderful in the States right now.

The ones who caused the dollar to fall to new lows yet again as US repossessions hit 130,000 a week. That's 6.7 million people being put out of their homes this year.

Recently, we had the bizarre scenario of US regulators effectively begging banks to be more lenient on subprime borrowers in difficulty.

Closer to home, credit experts Experian predicted this week that even another quarter-point rise in interest rates (two may be on the way) would see UK repossessions soar from 17,000 a year to 44,000. A full percentage increase would see them go up to 57,000, many with subprime lenders.

What are the chances of a similar increase here? Bloody likely. You could bet your house on repossessions here doubling, or even quadrupling, as sub-prime lenders move in and storm clouds gather over the property market. Experian issued its UK warning based on what it regards as a worrying record high in the amount British people are borrowing. The sum it is so concerned about is an average new mortgage figure of 220,000. But that's a lot less than half of the cost of a second-hand house in Dublin ( 517,865).

The figure was contained in the latest housing bulletin released this week by the Department of the Environment. What's worse is that a shocking 38% of borrowers were paying this sort of price with 100% mortgages . . . and 45% were doing so on their own with a single income.

Repossessions here have already doubled in the past five years, albeit from a low base. They rose from just 25 in 2001 to 50 last year. But that is likely to be the tip of the iceberg. Credit experts believe the number of repossessions is artificially low here because most people in trouble sell up before the vultures settle. That was fine and dandy in a rising property market, when buyers were queuing up to hand over exorbitant sums. Now the market is dead in the water.

Houses are remaining unsold for up to a year. And few troubled borrowers can afford to wait that long.

Another reason repossessions are going up is the very recent arrival here of a swarm of the aforementioned sub-prime lenders. Typically, Irish lenders repossess a couple of homes a year. NIB had none last year. Bank of Ireland had two and Permanent TSB, the biggest mortgage lender, a mere five. However, in the past 12 months one new sub-prime lender alone has been in court 30 times . . . after "hardly a wet day" in the market. You can be sure that figure is going to increase when credit problems have had a chance to fester.

But what about all the new regulations that banks are always complaining about?

Mortgage holders are much more vulnerable than they think, particularly with subprime lenders. This lot are, incredibly, not very well regulated. Last month, the Financial Regulator urged finance minister Brian Cowen to enhance the very limited powers it has over sub-prime lenders. He should take heed of this soon.

But even if the regulator did take sub-prime lenders under its wing, there's nothing it can do to control interest rates, and it doesn't seem to want any such powers.

Traditionally, lenders have increased interest rates only in line with rises imposed by the European Central Bank.

But there's little to stop lenders increasing loan rates to existing lenders as much as they like . . . within the terms of their contracts . . . apart from a desire to protect their longstanding reputation.

Traditional banks won't want a spate of repossessions and hassle with borrowers besmirching their name. Subprime lenders may not be so precious about their cute and cuddly brand (dreamt up, as it was, in five minutes by some marketing dude). They can always make another one.

Another possibility with sub-prime lenders that's unlikely with the main banks is the chances of them selling on your mortgage to someone else, who may be even less scrupulous about collecting money owed. Mortgages are tradable securities that, until recently, were much soughtafter by investors. The major banks aren't going to flog off their best customers' mortgages to dodgy debt collectors. Others may not be so scrupulous about how they make a quick buck.

HOW SUB-PRIME LENDERS WORK ON YOU

Joe and Sinead have a poor credit history. They want to remortgage to pay off their burgeoning debts but they have already done this several times before and their existing lender is having none of it.

They see an ad from the sub-prime lender promising to wave its magic wand and sort out all their problems.

Hey presto! They get a big fat cheque and use it to repay their debts, buy a car and go on a muchneeded holiday.

Sub-prime lenders target people who have trouble paying off loans. Then they typically charge them varying rates according to the degree of desperation they gauge in their clients . . . up to double. Joe and Sinead are very desperate and get charged accordingly. But they don't even check what interest rate they are on.

They rack up their credit card debts all over again.

Their situation is now much worse than before because the interest rates are twice as high, they have extra debt and, critically, all of their borrowings are now secured on their home.

They can't meet repayments. But the sub-prime lender isn't that bothered because it has the deeds to their house. It goes through the motions and forecloses on their home, as it is entitled to do under the terms of any mortgage contract.