MPLC accused of using dirty tricks

Mortgages PLC has been accused of trying to drum up business with a dirty tricks campaign against Infinity Mortgages.

The Merrill Lynch-owned sub-prime lender sent a letter to brokers last week entitled ‘More than Infinity? Yes it’s possible’, which explains that it no longer funds Infinity products. The letter goes on to say: “We would love the opportunity to keep dealing with you. Rest assured we can offer you a lot more than you were previously able to obtain.”

Simon Biddle, head of marketing and communications at Infinity, says: “We are flattered one of our competitors sees Infinity as such a significant threat that it has adopted this approach. The feedback to our sales team has been overwhelmingly positive. The Infinity team thanks it for promoting our brand.”

But a spokesperson for MPLC has defended the purpose of the letter as merely to update brokers on its position and product offering.

Infinity hit the headlines last week with its directors’ associations with Unity Homeloans, a lender launched as a joint initiative between Investec and the Professional Mortgage Packagers Alliance to provide products exclusively to the members of PMPA.

Unity has since come under fire, accused of being little more than a branded lender after it emerged that, prior to August 11 2005, the company was called Infinity Mortgages No. 2.

Though Infinity Mortgages is also funded through Investec, Ian Nelson, CEO of Unity, says Unity is a standalone lender in its own right.

He adds: “We are using Infinity as a back end office, but Unity is completely independent.”

Unity was also criticised for the distribution of its shares – 25% of shares are held by Investec, 25% by Infinity management and the remaining 50% by the PMPA. But it is unclear how this 50% is broken down between PMPA directors and members other than that members’ shares are changeable depending on business conducted through membership.

That means that if the company is sold, members that did the most business with Unity stand to take home the biggest share.

Ravi Takhar, chairman of Infinity, says: “50% of the shareholding group is the PMPA and its members. The distribution of shares is confidential.”