View more on these topics

The non-conformist that joined the mainstream

Southern Pacific Mortgage Limited first entered the UK non-conforming mortgage market in January 1997. Its products now cover the complete credit spectrum, with a prime lending product available since February 2003. The SPML portfolio also includes second charge loans, a flexible mortgage and bridging loans. The company occupies two sites in Kensington (pictured above), with the administration and accounts departments located in High Wycombe where a second office will be opened shortly.

Q: How is SPML structured?

A: SPML is a wholly-owned subsidiary of Lehman Brothers, the global investment bank. The managing director is Bill Cherry; John Prust is sales and marketing director; Angela Davies is director of operations; Stuart Aitken is director of credit; and the finance director is Andrew Townsend. SPML and SPPL (for second charge loans) have a team of eight regional managers covering the UK, supported by regional business development managers.

Q: What are the pros and cons of your core product range?

A: The pros of the range are that it covers the whole credit spectrum from non-conforming to prime and it offers a comprehensive range of mortgage products including standard, buy-to- let, Right to Buy, large loans, bridging and second charge loans – all with options for self-certification of income. Competitive fixes and discounts are available on the majority of first charge products.

SPML also offers third party loan servicing to other lenders – principally building societies that have purchased pools of non-conforming mortgage loans – and has recently achieved excellent loans servicer rankings from Standard & Poor&#39s and Fitch Ratings. As far as cons go, we are told by some of our packagers that our credit criteria can sometimes be on the conservative side.

Q: What is your distribution strategy?

A: SPML is a wholly intermediary-introduced mortgage lender and does not accept applications direct from the public. Applications are submitted via a panel of mortgage packagers and the company is currently rolling out a programme of branded lending with selected packager partners. SPML&#39s front end operation, underwriting, technology, and administration are all geared to fast lending decisions and post offer completions. We believe regulation, consolidation and the growth of IT will radically reshape distribution channels in the intermediary lending sector.

Q: What services do you offer to intermediaries?

A: With regulation at the forefront of everyone&#39s minds, SPML continues to give strong support in this area. A third round of regulation roadshows will take place during November and our packagers have access to a highly experienced SPML compliance team if they want to discuss regulation issues. Regulation updates and other information are regularly emailed to packagers and are downloadable from the website – as is other mortgage documentation and information. SPML also offers support from roving and inhouse underwriters enabling speedy decisions to be made from the packager&#39s own office. Tailored marketing support schemes are offered to provide business synergy and a packager training scheme is in place to provide the company&#39s introducer panel with help in training staff.

Q: What impact will regulation have on your business?

A: We have a full compliance team and all the procedures and controls in place for authorisation. The impact of regulation will be felt across the whole market rather than by individual lenders. For example, the FSA&#39s ban on cold calling will impact across the board. However the larger, well established packagers are well-run businesses and they are putting strategies in place to adapt and prosper.

Q: How do you see the intermediary market in two years&#39 time?

A: In one year&#39s time, when the authorisation status of intermediaries is known, things will be a lot clearer. Over the longer term SPML certainly anticipates consolidation in the market with fewer, larger packagers and the rise of networks.

However there is no reason to suppose that the overall volume of business will diminish. On the contrary, the publicity surrounding FSA regulation is likely to lead to a larger intermediary sector as borrowers are reminded that mortgage choices are important and start to seek third party advice more actively. Just like any maturing market the better providers will be more successful than the more mediocre ones.

Thumbs up or thumbs down?

Paul Brett – Fastcom

SPML has gone from strength to strength in the past few years. It has not tried to please everyone and has never bowed to pressure to open its doors directly to brokers and the public. This has enabled it to streamline its productivity and service above its competitors. It has embraced the changing sub-prime market by diversifying into prime lending and secured loans, offering greater all-round service. It offers genuine support to its packagers and still attaches great importance to relationships.

Phil Jay – BDS Mortgage Group

A good working relationship is vital in today&#39s mortgage market and that&#39s what we have with SPML. It offers a competitive and simple range of non-conforming products. SPML achieves a good rating in the light adverse sector, based on rate, entry and exit fees. Service is also strong. Mobile underwriters are always on hand at SPML&#39s processing centre so decisions can be made inhouse and packagers have one port of call which is invaluable. This is how we promote the use of our sub-prime panel to our intermediaries.

Bill Curran – Capital Mortgage Lending

SPML&#39s service is particularly strong and it turns cases round impressively fast. Underwriting is realistic. Technology is all well and good – and SPML&#39s is excellent – but it is great to be able to speak to a real person. The personal touch makes a difference. The prime products are good and there is a good range of buy-to-let, Right to Buy and flexible deals, but SPML is not trying to be all things to all people. Rates are strong at present and we use SPML&#39s products for remortgaging above all.

Recommended

Blevins Franks Mortgage Services launches equity release guide

Blevins Franks Mortgage Services has launched a guide to equity release schemes The guide has been designed to inform people aged 60 considering an equity release scheme about the different options available to them and to highlight both the benefits and pitfalls. Under-funded pensions and depressed annuity rates mean many retired people need to supplement […]

Accord latest lender partner of Mortgage Brain

Accord Mortgages is to become the latest lender partner of mortgage sourcing provider Mortgage Brain. Lender partners have the opportunity to proactively verify key mortgage product features as displayed on the Mortgage Brain sourcing system, and it is the only system to offer this capability. Accord will begin to verify its products later this year, […]

Mortgage Pro to display sourcing system at Mortgage Expo

Mortgage Pro will be displaying its modular mortgage sourcing and processing system at Homebank&#39s stands at this years Mortgage Expo. Delegates will be able to see how an application is sourced, compliant documentation produced and a fully completed application is sent to the head office module for processing. Homebank Mortgages PLC, which will be recruiting […]

Personal debt balloons to over £5,000 each

Unsecured personal debt has grown by almost 50% since 1997 and now stands at £5,330 per person, data from the Office of National Statistics has revealed. The data has raised great concern with incomes growing by only 23% over the same period. Personal debt has grown twice as fast as incomes since 1997 and has […]

Why prevention is better than cure

Quoting the famous adage, prevention is better than cure; there are many proactive benefits that can improve wellness in the workplace, decrease stress, increase staff morale and reduce absenteeism, as well as attracting and retaining employees of a higher standard. With a recent study showing that employees in Britain are working below peak productivity, preventative benefits can ensure you address potential health issues or causes of stress at their source and ensure productivity in the workplace remains at an optimum level. With this in mind, how are you using preventative benefits to help keep your workforce happy and healthy?

Newsletter

News and expert analysis straight to your inbox

Sign up