The secured loan industry is somewhat of a sitting duck at the moment and is waiting for things to clear up in the first mortgage market before the good news can filter through to the seconds market.
The secured loan industry was one of the first to feel the bite from problems that originated in the first charge market, but no doubt the secured loan industry will be one of the last to feel the benefits when markets conditions do improve.
One of the most noticeable impacts the current liquidity crisis has had on the secured loan industry is the way in which lenders have changed their attitude towards brokers, when the times get tough, the tough seem to turn towards themselves it seems.
A lot of lenders have tried to run up as much business through their direct channels as they can and let the broker take a back seat for the time being. A few lenders have started to come out with rates that are only available to the broker if they go direct through the lender, which is bad news for brokers. However, rather than sitting licking their wounds, brokers are starting to adapt themselves, and for those brokers that relied heavily on sub-prime business, they have started to revamp themselves more than ever.
On the positive though, lenders that are still in the market have shown their commitment to the market and there are a lot out their that have formed greater relationships with brokers as a result of the last few months.
It will be a long time before confidence starts to return to the market and the US and UK investors start to feel safe operating in the secured loan sector.
Until then, brokers need to make sure that they keep adapting to the market and keep their head above water until the storm passes over.
There is still huge demand for secured loans and this will continue throughout 2008, when the market comes back it will come back with a bang and for those of you that are still in the market it will have been well worth the wait.