More than just sub-prime

30 March 2010 | By Dale Jannels, sales and marketing director, AToM

I mean, I’m up against the serious bloggers in Monty, Ray and ‘Sir’ Sinclair.  What’s more, who would read the blog of a mere mortgage packager/specialist distributor? 

I suspect three people at most. The first who will leave an anonymous comment complaining about something I choose to say. The second will find something of value, copy and use it, causing me umpteen issues via twitter or facebook over plagiarism. And the third will read it, not really take much note as they’re still panicking over placing a case on their desk (which they’ve had for months) requiring an 85% self-cert deal.

Oh yes, we still get that special daily call…

So, after much deliberation, I thought what the heck. 

There has certainly been a shortage of voices supporting our industry sector of late and I aim to help fill that gap, whilst at the same time giving an insight to the trials and tribulations of being a specialist packager/distributor.

Like most, the specialist packager/distributor fraternity have diversified over the last couple of years. 

However, the core functionality remains, in the main, exactly as it was before - sourcing/placing; packaging; instructing/challenging valuations; chasing offers and completions; offering niche products; distribution; and more. 

But, even more so these days, ancillary products are complimenting the core activities. 

These include bridging finance, secured (and unsecured) loans, commercial mortgages, assistance and support for non regulated intermediaries, insurances etc, etc.  

The list goes on. 

And, more recently, complex prime, although some of us have been offering this for years.  

A very simple phenomenon - going back to basics, manual underwriting for clean clients who simply fail the high street’s ‘credit scoring mentality’, often for no apparent reason. 

Incidentally, it was for these exact types of people that credit scoring was set up, yet it is turning away asset rich, cash rich, credit short clientele….probably the best type of clients.

The surviving, re-emerged specialist packagers/distributors are becoming the one stop shop for all financial needs and requirements.  We’re going strong and if anything, our proposition and offerings are getting stronger.

Some lenders remain packager friendly.  igroup, the GEMHL owned lender, are without doubt, the most positive and forward looking lender within our market. 

They have regularly requested, and listened to, feedback and sought gaps in the market where they could provide a niche proposition. 

On top of this, they only deal with a limited number of distributors and have recently gone through two rate reductions, with the last being up to 1%. 

All this from a lender who allows some historic adverse, should the case pass credit score, and rates starting from 3.49%.  If only we had more lenders like them in the market.

Especially as the enquiries for sub-prime/adverse/non-conforming/credit repair mortgages are most definitely on the increase again.  

In many cases the applications are from people who have suffered genuine hardship through divorce, or suffered due to the recession/redundancy and these are the people who need/deserve help and a sensible underwriting assessment.   

Depending on the adverse, the options available, below 70%LTV, vary.  Of course, the more adverse, the lower the LTV, a higher rate and, in some cases, a longer term redemption penalty!  For those over 70%LTV, there are minimal, if any, options depending on the adverse.

Yes, there are other lenders who will look at applications on a case by case basis but, in the main, there are only a small number who will look at adverse cases and thank goodness they are still lending.

For those customers who simply have the “won’t pay” attitude, lenders quite rightly have a “won’t help” response!

Given the above I will endeavour, in future blogs to identify the various issues and benefits of working with the specialist packager/distributor marketplace and hopefully start to dispel some of the mystique which surrounds it.  As we’ve proved, our sector can adjust and survive and we’re around for the long term. 

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