60 Seconds with.....Stephen Knight
Share
What’s happening at Checkmate?
We are holding in launch minus three months readiness mode. Precisely when we launch will be decided by an institution that finally wants to put new money into the mortgage market. We are putting ourselves in the position of being the obvious choice for such an organisation. We are currently in conversation with 15 potential lenders but these talks are moving slowly because the market is recovering slowly.
What have you been doing in the meantime?
We’ve built a £10m computer system that has no legacy issues. It incorporates the latest technology to prevent fraud, check identity and provide speedy offers. At the moment about 85% of all mortgage lending is concentrated in six lenders. Some of them are taking 25 days to open an envelope while others are taking 25 days to come up with a decision in principle. Our system will issue a decision in principle in 25 seconds.
Is that what the market requires?
Anybody who makes money out of innovation never launches what the market requires because a market cannot collectively innovate. In my view lenders are still adding costs that ultimately borrowers have to pay. They are not adding quality. In my 37 years in the business I have not seen a more sophisticated technology or methodology than we are using.
What is hindering a recovery if the credit crunch is technically over?
The market is picking up a bit but there is still a long way to go. Lenders are shoring up their balance sheets to provide greater levels of capital than they had before.
Also, there’s still a shock factor in play. When you consider upheavals such as the chaos at Northern Rock followed by the collapse of Lehman Brothers it’s obvious that it will be many years before the impact of these no longer affects the way consumers feel.
The third reason for the slow recovery is the residential mortgage-backed securities market. It’s got to come back - tens of billions of pounds worth of funding will be available for lending when banks can see an exit in the securitisation market.
Do you envisage a return to specialist lending?
In any dynamic market demand will find a source of supply but I won’t ever lend on a significant adverse or self-cert basis again. Product innovation and picking appropriate individuals to lend to is what excites me now.
We’ll be almost totally prime and go back to what we’ve been great at for the past 22 years - product design.
