US Financial giant Morgan Stanley is rumoured to be looking to buy Advantage Home Loans in a deal that could be announced in the next few months.One source tells Mortgage Strategy that the deal could be finalised as soon as December, and Advantage will soon be calling in its sales team to discuss the plans. A senior industry source says Morgan Stanley is “hungry to join the race” started by its investment banking competitors and wants to get “closer to the collateral”. The source says: “Investment banks have decided they need to get into the origination business. Those that haven’t already made acquisitions are looking to purchase distribution or create lenders.” Mortgage Strategy revealed in July that the bank was considering launching a UK sub-prime lender within the next six months. Keith Dearling, founding partner at Advantage, will not comment on the Morgan Stanley rumour but says exciting times lie ahead. He says: “As a company we have a lot happening in the next couple of months that will be exciting for us and the industry.” A number of underwriters at Advantage have recently been replaced by processors. This has prompted industry speculation about the possibility of a lender buying Advantage. But Dearling says: “We have recently replaced a lot of our underwriters because of the way we are processing our mortgage applications. With firms like GMAC-RFC and Platform, we use online decisions. “More of our cases are done online now so there is less need for heavy labour by underwriters.” There are predictions in the industry that if the Morgan Stanley deal goes through, it could intensify the price war as the new lender prices aggressively to build market share in the hope of enjoying higher returns in the long term. But one source says: “Investment banks might need to revisit their strategies. They have a record of being ruthless pursuers of profit and they exit markets as quickly as they enter them.” Wayne Smethurst, partner at The Finance Centre, says it will be good news for the packagers that remain in the market and maintain their independence. He says: “Morgan Stanley made no secret of its intention to launch a lending operation in the UK. Acquiring a packager is one way to kick-start this. But once a packager is sold to a lender it loses its unique selling point.” Morgan Stanley originates upwards of US$11bn of commercial mortgages annually and has been a global underwriter of commercial mortgage backed securities, managing more than $79bn of offerings since 1997. When contacted, Morgan Stanley declined to comment.
- Top trends
Purely Financial Group, which trades as one of the UKs national low fee mortgage brokers Purely Mortgages, has announced that Triandra has made an investment for 50% of the enlarged share capital of the company. Triandra is ultimately owned by Investec Trust as trustees for the Tchenguiz family trust. Mortgage Ventures, Purelys seed investor, retains […]
London & European has moved into the heart of the City and has rebranded its image.The company says the changes reflect its evolution from a pure title insurer to a provider of solutions that enhance the speed, simplicity and security of property transactions.Alan Smith, managing director of London & European, says: “Over the past 10 […]
Dashboard Software, the web-based solution for mortgage intermediaries, and Goldsmith Williams, the direct conveyancing firm, have announced the launch of a joint electronic trading initiative.As a result of this partnership, Dashboard Software users can submit instructions electronically to Goldsmith Williams at the click of a button. All the information required by Goldsmith Williams is received […]
Key figures from the Home Office, the Metropolitan Police and the Serious Organised Crime Agency have praised the contribution made by the financial services industry to fighting corporate crime at the Finance and Leasing Associations recent financial crime conference.Leigh Lewis from the Home Office singled out FLA members for special praise as sponsors of the […]
By James Dowey, Chief Economist and CIO, Neptune Investment Management The current volatility in global markets has precisely the same cause as had the major bout of volatility last August. As the Chinese RMB is pegged to the US dollar, US monetary policy gets exported to China. This means that a strong US economy and […]
News and expert analysis straight to your inboxSign up