While the anniversary of mortgage regulation is unlikely to have been celebrated by many, for Money Partners November 1 marked a year since its inception.Born of the imagination of a throng of former igroup executives, in the past 12 months Money Partners has carved out a reputation for service. Despite the trials and tribulations the market has suffered in the past year, chief executive Colin Sanders says his company has seen steady growth and is on track to hit all its targets. And it’s that steady growth that has been vital to the funding arrangement with its primary backer, Kensington Mortgages. Kensington owns 20% of the company – the remainder is owned by the management team -and has an option to acquire a further 30% in the next 12 months. Provided targets and corporate objectives are met, Kensington will acquire 100% of the business in 2008. When Money Partners was looking for a funding partner it courted a number of suitors. Eventually it was Kensington’s 10 years’ experience as a lender and its solid experience of mortgage asset sales through securitisation that made it the perfect fit. The lenders operate in different sectors of the sub-prime market and as long as Money Partners continues to hit its targets, Kensington will be happy. At 41, Sanders’ background is steeped in mortgages and he regards himself as “an industry guy”. After school he started as a broker for London-based Empire Mortgages and later moved to lender National Homeloans in the late 1980s. He then went to work for City Mortgage Corporation. You could argue CMC was a pioneer in the sub-prime market, but you can’t ignore the fact that borrowers with CMC were routinely signed up to deals at rates just short of 10%. However, dual pricing meant that if borrowers were hit by redundancy, sickness, unemployment or were otherwise forced into arrears, the rate would go up to just under 20% with massive redemption policies to boot. The assets of CMC were later acquired by Ocwen, a US financial services company, and its UK subsidiary Ocwen UK eventually became igroup, which later sold to GE Capital. It wasn’t long before Sanders moved up the ranks and he was soon serving as chief executive of igroup. “I learned a lot there as it was a different environment to operate in – very corporate, naturally, GE being the largest business in the world – as we used to hear regularly,” he laughs. Although he enjoyed his time at GE, a three-year non-compete clause came to an end and thoughts naturally drifted to what he was going to do next. Speaking to David Johnson, who’d been managing director at igroup at the time of the sale to GE, he saw the opportunity to set up something new. “When he said he had an appetite to do something new, for me it seemed an ideal partnership,” says Sanders. Johnson now operates as chairman at Money Partners and no doubt acts as a sounding board for Sanders. For Money Partners it’s an ideal mix – the lender has the look and feel of a corporate but the gusto and entrepreneurial flair of a start-up. “We want to make things happen but we’re in a business that’s small enough and young enough to move quickly. In some bigger corporates it’s like turning an oil tanker.” Launching a range of first and second vanilla mortgages in November last year, Sanders says from the start the main battle in the market was for service. It initially launched to a limited panel of 30 brokers. That number has now risen to 100. “Of course, price and commission are important ingredients within the proposition,” he says. “But if our service delivery failed, I reckoned we wouldn’t get a second chance.” It’s been a successful year, and even in a difficult market Money Partners will have originated 1bn in mortgages and loans combined by the end of this month. For Sanders and the team at Money Partners, that certainly is something to celebrate.
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By Roy Armitage, head of credit at LendInvest Last month saw three-quarters of the membership of the Council of Mortgage Lenders (CML) vote in favour of plans to create a super-trade body, which would see the CML merge with the likes of the British Bankers’ Association and Payments UK. There is little room for misty-eyed […]
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