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It’s time for lenders to declare what they earn in this regulated world of ours

From Guy Garrard

Since the dark uncertain days of November 2004 and the advent of the new world of regulation there has been something nagging at the back of my mind about our world of transparency and Treating Customers Fairly. It’s been there now a year and the nagging is now reaching spouse-like proportions.

Quite rightly, we exist in part of a regulated food chain. As a packager our customer, the broker, sees what we earn. His customer, the borrower, sees what he earns and yet at the end of the chain is the party that regularly gorges itself at the table, thelender. Where isthetransparency the Financial Services Authority seeks?

Of course our lender friends exist in a much more complicated world than the humble broker or the second hand car-selling packager. They live in a world of necromantics and deep subtlety that we poor souls will never comprehend. HPAFs, ERCs, through lending, whole loan sales, and the darkest magic of all… securitisation.

Any gentle quizzing as to their stake in all this is usually met with a standardportfolio management blocking answer or some complicated algorithm that sends us scuttling for cover again.

A conversation on this subject at the recent Council of Mortgage Lenders’ annual dinner while playing the usual game of “identify the dinner” led to an interesting offer by one of our securitisation-friendly lenders. They offered to declare openly their earnings on their next securitisation so that we could all see what a meagre existence theirs is. But this brave promise was made with the proviso that they wanted their competitors to follow suit.

So come on guys. You are forever telling us how tight margins are (despite the plethora of new lenders appearing that seems to refute that suggestion). Come and play the game of transparency with the rest of the regulated players. Let’s see some of those earningsstatistics published in our industry press. Some chance.


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