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Advantage’s fall no sign of US retreat

There was more bad news for the mortgage market recently when US investment giant Morgan Stanley decided to close Advantage.

The sub-prime lender is the highest profile casualty of the liquidity crisis that has been raging for over six months.

Advantage was seen as a dream ticket when the US firm transformed it from a packager into a lender in 2006.

It recruited some of the biggest names in the industry with a huge wealth of experience and a great track record.

This quality team comprised not just senior management but credit, risk, sales and underwriting functions too.

If there was ever a talented group of people who could create a market-leading lender, it was Advantage. It seems not just ironic but also unjust that under two years later every member of the team is now redundant and faces the task of finding a new job in a contracting market.

In the good times many of us embraced the arrival of our friends from the US. They brought the dynamism and wealth of the world’s largest economy to bear on the UK mortgage market.

Thanks to their efforts, an often antiquated market that had remained the same for a decade changed more in six months than it had in six years.

Does Morgan Stanley’s decision lead the way for a full-scale retreat across the Atlantic?

In the words of Dad’s Army’s Corporal Jones: “Don’t panic!”

The UK mortgage market remains in good shape. The losses US firms have suffered in the credit crunch were not caused by the market here but rather by gambles that didn’t pay off in the US.

Although Morgan Stanley may not be the last US lender to pull out of our market, this does not mean they are all going back to Wall Street.

And good luck to Advantage’s staff. Here’s hoping that the top-notch people it brought together find suitable homes for their talents.

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