Mortgages PLC is to launch a joint venture with broker mortgageforce to offer sub-prime loans direct to the consumer.
Full details are due to be revealed next week but Mortgage Strategy understands that under the terms of the deal most of the 128 mortgageforce franchisees will market sub-prime loans exclusively from MPLC under a separate trading name, Spring Mortgages & Loans.
Although marketed under the Spring trading name this is the first time that mortgageforce will be heavily involved in the sub-prime market having previously focused on mainstream broking.
Mortgage Strategy exclusively revealed last September that MPLC was looking to launch a direct to consumer operation. At the time, the London City and Glasgow-based lender was denying it had appointed John Rice in August 2003 to oversee its development.
Rice, who went on to become the managing director of RAMP, was the former head of sales at retail sub-prime operation The Mortgage Lender, owned by rival lender Kensington Mortgage Company. His appointment at MPLC was terminated shortly afterwards and has nothing to do with the mortgageforce joint venture.
Mortgage Strategy also understands that mortgageforce will be controlling both the front and back end of the direct to consumer broker that will introduce solely to MPLC.
In a regulatory light, the operation will run similar to the way The Mortgage Lender and Kensington operate.
MPLC and mortgageforce, which have been working on the deal for months, have been seeking the services of at least one lead generation firm in a bid to get sales off the ground from day one.
Peter Beaumont, MPLC sales and marketing director, and Rob Clifford, managing director of mortgageforce, were both unavailable to comment.
Last September Beaumont told Mortgage Strategy: “There are three types of acquisition cost. Through a branch network is the most expensive bar none. Second is through intermediaries and the cheapest is direct to consumers through a central point – similar to centralised lenders.
“Along with the rest of our peer group we are looking at all the options that are available to us in a pre and post-regulatory environment. Any lender that says they are not is probably not telling the truth.”