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TPAs will need to be creative to survive

The mortgage market has changed hugely since the seismic shocks of 2007/8 – and not just for lenders and borrowers.

Consider the plight of third party mortgage administrators, who between 2000 and 2006 gorged on a regular supply of new lenders, particularly in the sub-prime or specialist lending space.

These lenders had no interest in building expensive infrastructure to service the loans they created – all their energy went into product distribution. And because they were more than likely to sell or securitise their assets, an outsourced servicing arrangement worked perfectly for them.

Now, almost all these lenders have disappeared. Their unfunded warehouse assets have been sold and the books are running off.

A lot of the assets were bought by private equity houses or hedge funds. Some of these left the assets where they were but many took them in-house for more intensive special servicing.

With the trade in assets slowing to a trickle and no new lenders coming to market, the future for third party administrators does not look particularly rosy.
While a couple of servicers are enhancing their reputation even as others struggle to survive, the overall picture is far from vibrant.

So servicers are unlikely to come through this downturn completely unscathed.

But the more energetic and creative will survive and it would be good to know in advance who is up to the mark and who is not.


Former CML chief joins Deloitte

Deloitte has appointed former Council of Mortgage Lenders director-general Michael Coogan as strategic adviser to its financial services practice. Coogan joins Deloitte today and he will be working closely with the retail banking and building society advisory group. He will particularly focus on the firm’s insight into the retail banking and mortgage markets. The role […]

Coventry offers ERC-free letting deals

Coventry Intermediaries has launched a new range of mortgage products, including some five-year buy-to-let deals with no early repayment charges. The lender is introducing a buy-to-let five-year fix at 5.35%, which is available up to 75% LTV with a £250 booking fee and £999 arrangement fee, and no ERCs.It is also offering the same product […]

Paragon reduces rent income requirements for B2L deals

Paragon Mortgages has lowered its rental income requirement and launched a new range of products. The lender is reducing its rental income requirement for single unit properties from 130% at 7% down to 125% at 5%. Its calculation for houses in multiple occupation and multi-unit properties remains at 130% at 7%. A spokeswoman for the […]


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