A major UK mortgage lender has collapsed into administration. Market Financial Solutions entered administration after a High Court judge determined that "very serious" allegations of fraud needed investigation, sparking renewed concerns about the private credit sector.

The Times reported Barclays has £600 million exposure to MFS. Citi advised the figure should be viewed with some scepticism.

"Arranging a loan is very different to retaining that risk on B/S (balance sheet)," Citi said. "Also not clear if/how much could already be provisioned against (if anything)."

Barclays and Jefferies are reportedly among lenders with multimillion-pound exposures to a UK mortgage company that has collapsed amid fraud allegations.

Paresh Raja, its founder, said at the time the action did "not reflect a failure of the underlying business or the quality of our assets, but rather a technical and procedural impasse that has temporarily limited our access to everyday banking facilities". Insolvency experts from Alix Partners were subsequently brought in after two creditors to Market Financial Solutions, Amber Bridging and Zircon Bridging, alleged there were "serious irregularities" in its financial records.

Jamie Dimon, the chief executive of JPMorgan Chase, warned in October: "When you see one cockroach, there are probably more, and so everyone should be forewarned of this one."

Earlier this week, he also sounded the alarm that certain lenders are engaging in "dumb things" and he's starting to observe parallels with the era before the 2008 financial meltdown.

He said: "I see a couple of people doing some dumb things. They're just doing dumb things to create [net interest income], or say they're winning in the mortgage business."