In an unprecedented move, the heads of sev-en rival companies together representing more than 30,000 brokers recently teamed up and rode into town to present an open letter to brokers. John Malone, managing director of Premier Mortgage Service, heads the group.
The letter is an honest assessment of the state of the intermediary mortgage market and I congratulate the group for not going down a road that could have soured the relationship between brokers and lenders at this difficult time.
Instead, it takes a sympathetic view of the problems lenders are facing before pointing out that the situation will not change until the Bank of England and the government intervene to restore confidence in the wholesale markets.
I agree. We have seen market confidence falling because of write-offs due to mortgage-backed securities and there will continue to be funding problems until there is a consensus on the way to bring about a recovery.
So it’s pleasing to note that in the wake of the magnificent seven, a sheriff is also about to make his entrance. Chancellor Alistair Darling has set up a working group fo-cussed on the mortgage market.
Leading this team is deputy chairman of the Financial Services Authority Sir James Crosby, who has been briefed to work with lenders, the BoE and the Treasury and report back in the summer with a plan to reopen the market.
The willingness of all players in the sector to bring something positive to the table is heartening but we must not become complacent – we’re still a long way from the sort of prosperity the market enjoyed until last year. Recent statistics from the Council of Mortgage Lenders show the take-up of mortgages has declined for four consecutive months so on the frontline, brokers must be feeling that de-spite the positive signs, tough times stilllie ahead.
But I believe that given cooperation between the government, brokers and lenders, the situation can be turned around. After all, as the chancellor says, the economy has been remarkably re-silient in recent years.
I hope the enthusiasm to resolve our problems does not fade and the momentum keeps rolling, rolling, rolling.