PMS Q1 completions down 20%

Mortgage Strategy can today unveil the full extent of the credit crunch with news that completions at Premier Mortgage Service plun-ged 20% in Q1 compared with the same period last year.

Mortgage Strategy estimates that the value of the mortgage club’s completions in 2008 will slump by a whopping £8.3bn if business volumes remain at such low levels during the rest of the year.

PMS, the UK’s largest mortgage club, processed £41.5bn worth of completions in 2007, up from £36.4bn in 2006. This estimate tallies with market predictions that gross mortgage lending will total a mere £250bn this year.

Industry sources expect PMS managing director John Malone to come under growing pressure from PMS’ parent group Bankhall despite the club’s performance being in line with wider market trends.

Recent data from the Bank of England shows that mortgage applications have dropped by a massive 37% in just 12 months.

Meanwhile, Trigold has revealed that a whopping 23,000 broker products have been withdrawn over the past six months. The number of deals featured on the sourcing system declined from 45,590 last August to 21,988 in February.

The issue has sparked fury among brokers, who have become frustrated by lenders’ failure to give adequate no-tice when pulling deals. But Malone and a group of seven key distributors are urging brokers to be more sympathetic as lenders try to balance business volumes with servicestandards and funding costs.

In an open letter to brokers last week, Malone says: “Some intermediaries have accused lenders of acting irresponsibly and under TCF they should be referred to the FSA.

“This action by lenders in our opinion does not constitute part of the TCF regime, but more a commercial decision to protect their own liquidity position in keeping with running their business in a commercially sound way.”

But Danny Lovey, proprietor of The Mortgage Practitioner, argues that the call for sympathy is “bollocks” as a number of lenders have been bypassing brokers by dealing with clients directly.

He says: “Lenders are trying to dispense with brokers as they don’t need them as much at the moment.”

But Malone says: “I don’t accept that lenders are getting together to work out how they can stuff the mortgage industry. We sent the letter to a number of lenders before we went to the press and not one of them is thinking that.”

l A full copy of Malone’s letter can be found on