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TFC Homeloans calls for rebrand of sub-prime

TFC Homeloans, the specialist distributor, believes that the lighter end of the sub-prime mortgage market could be returning, though those choosing to operate in it will continue to reject the traditional terminology.

It says by rebranding the sector lenders and advisers will avoid associating themselves with the negative connotations of adverse credit.

The distributor points at recent debate around the resurfacing and redefining of the term ’complex prime’ as proof there will be widespread reluctance to use terminology such as ’sub-prime’ or ’adverse credit’, as they have become ’dirty words’ in the public perception.
 
Andy Brown, managing partner of TFC Homeloans, says: “This sector of our industry needs a rebrand. Lenders used to proudly define themselves as ’sub prime’, ’adverse credit’, ’non conforming’ or the umbrella term ’specialist’, but they now distance themselves from this business, but also from the language.

“We now see lenders not credit scoring, others helping applicants with CCJs and defaults, but all insisting that they’re not operating in sub prime mortgage lending. That’s a fair claim, but it’s a distraction, they’re now helping clients who were out in the cold previously, which is good news all round.

“My point is that lenders wouldn’t have seen such need to deny or admit the terminology in the past. We now use the new term ’complex prime’, which wasn’t commonly used before, which is quite distinct and which may or may not survive. We’re likely to see other terms appear, to segment and define the market when lending appetite returns.”

Derek McGuire, co-founder of Marketing Innovation Forum, says: “Just as companies rebadge and rename themselves to shake off negative associations and appear fresh, the financial services industry is distancing itself from the hellish public perception of ’sub prime mortgages’.

“Demand for a sub prime mortgage market has grown due to the recession, so lending should return at the lighter end, albeit rebranded. While lenders may recognise the potential and value the first mover advantage of servicing this large, lucrative market, they will have understandable worries about the PR nightmare of doing so.

“Funding is of course key, but reputation management is also important, and a rebrand addresses one barrier to reopening this market.”

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  • Paul 7th May 2010 at 1:58 pm

    Until the securitisation markets open up and we have investors willing to look at non prime RMBS the name will be irrelevant. Call it anything you like, as long as it is judged to be anything other than prime there will be issues in securitising, and without this there will be very little adverse/specialist/complex/almost, or whatever you want to call it lending

  • Anon 7th May 2010 at 1:02 pm

    Some excellent points here from Andy Brown, contrary to some of the negative views expressed here. Many packagers have just upped and gone.

    A large number of customers are struggling and more will join them as interest rates rise. Those advisors and packagers who are honestly seeking to help them should be encouraged not vilified.

  • julian wells 6th May 2010 at 5:41 pm

    I have a couple of points to make.

    Firstly, any packager still in business at this stage in proceedings cannot reasonably be accused of ‘not facing the reality’. Bear in mind that probably about 90% of this sector is no longer trading!

    Secondly, it’s completely inevitable and sensible that there will be elements of lending that are aimed at people who have had adverse credit, but there is no way any lender in their right mind is going to call it ‘sub prime’ because those two words are embedded in the world’s mind as the reason for a global recession. It would be like building a luxury ocean liner and calling it the Titanic.

    I’m confident we will see more and more specialist lending and there will be new names that are used to badge up ‘new’ products that we have seen in the past. Just don’t expect the proc fees to be anything like they were last time around!

  • simon 6th May 2010 at 10:20 am

    This is not a press release – this is a packager not facing the reality.

    I agree with another reader – ‘pointless article’

  • milo holmes 5th May 2010 at 5:36 pm

    I agree what has been said in this article, however we need more sub prime/ complex prime/ specialised lenders what ever they call them selves to be back in play, hopefully lenders such as Beacon will be back lending soon

  • milo holmes 5th May 2010 at 5:35 pm

    I agree what has been said in this article, however we need more sub prime/ complex prime/ specialised lenders what ever they call them selves to be back in play, hopefully lenders such as Beacon will be back lending soon

  • Anon 5th May 2010 at 12:31 pm

    Surely the people who are looking for Sub Prime mortgages dont really care what they are called?! They are just happy there is a lender able to assist.

    The people who would turn their noses up to the use of phrases like ‘Sub Prime’ or ‘Adverse Credit’ are people who wouldnt ever need a Sub Prime lender anyway!

    I can just imagine it now… After months of not being able to help genuine cases, you finally place a client who has CCJ’s and Defaults and when going back to them to tell them that you can actually help now, they say “Oh, it’s a Sub Prime lender you say? No thanks, ill leave it!”

    Bit of a pointless article!

  • Anon 5th May 2010 at 12:31 pm

    Surely the people who are looking for Sub Prime mortgages dont really care what they are called?! They are just happy there is a lender able to assist.

    The people who would turn their noses up to the use of phrases like ‘Sub Prime’ or ‘Adverse Credit’ are people who wouldnt ever need a Sub Prime lender anyway!

    I can just imagine it now… After months of not being able to help genuine cases, you finally place a client who has CCJ’s and Defaults and when going back to them to tell them that you can actually help now, they say “Oh, it’s a Sub Prime lender you say? No thanks, ill leave it!”

    Bit of a pointless article!

  • Greg Millis 5th May 2010 at 12:07 pm

    Isn’t this already up n running?, under the banner ‘Complex Prime’?