MIp10-11_1209:MI 12 Jan 24/11/2009 16:28 Page 21
Distribution | 11
The reality is that many lenders of all sizes
are feeling the pinch in some way. Most have
not, and still do not, have access to funds in
order to lend at levels the industry has come to
expect over previous years. In a commercial
sense lenders are having to do what they
believe is correct and while it is difficult for
intermediaries to swallow I’m sure that
when credit returns, products will also
return and lenders will still need
intermediaries to distribute these
though. On a positive note there are
some signs of improving conditions for
brokers with the recent reintroduction
of a small amount of exclusive and
semi-exclusive deals filtering through
into the intermediary landscape. But
this is going to be a slow process and
we can’t expect to return to the
unprecedented levels of a few years
ago soon, if at all.
Tranches
Harking back to the issue of tranche
management, the beginning of the year saw
Woolwich become one of the first lenders to
make an announcement that it was to give daily
tranches to a range of distribution channels and
brokers. The thinking behind this was to try and
eradicate some service issues by ensuring that it
had greater control over lending volumes. It was
obvious that lenders were, and still are, having to Control
evaluate their individual distribution models and systems FSA
in many ways this decision was indicative of how Having said that, it Mortgage
providers were looking at the distribution appears there is still some Market Review
market. appetite for systems that are proven to (MMR). The MMR has
Woolwich did have a mixed intermediary provide lenders with sufficiently robust control attracted much discussion in many areas
response to its funds booking system but the procedures over their lending exposure when including the rationale to impose affordability
obvious positive point to emphasise was that it aligned with regular updated data on how tests for all mortgages and to make lenders
was still operating in the market. Education is quickly a particular product is selling. There is responsible for assessing a consumer’s ability to
paramount to such innovations running therefore a place for an efficient and industry pay. This may indeed help reduce some risk
effectively and to be fair Woolwich did make wide tranche management system that lenders concerns but there is also an argument that the
some tweaks to its system in response to some can trust and work with to integrate into their move could make lenders even less willing to
adverse feedback. Indeed, the whole market has existing processes. lend. Inevitably, if implemented, this will involve
had to get used to a different way of working to Obviously technology has played an lenders having to be even more thorough in
get around the continued influence of funding important part in helping lenders and their processes, maybe having to revise existing
and credit problems. distributors utilise more stringent controls. systems which could even lead to increased cost
In response to market conditions many Some firms have made the strong decision to to consumers.
distributors looked to create their own bespoke invest in technology such as tranche Could the decision to make lenders
system and procedures to try and take advantage management and other areas such as client responsible for assessing consumers’ ability to
of those early days of funding problems. This management systems to make them work more pay also have detrimental affects on the broker
gave way to a myriad of different ways to efficiently. Such developments have enabled market? This remains to be seen but lenders
manage tranches of money. In many ways the firms to work smarter and whilst these systems would do well to remember how well they have
question still remains over whether lenders are may not be applicable to everyone there are been served by the intermediary market in the
entirely comfortable with the various tranche often ways in which to utilise technology to help past. Maybe in the MMR consultation period the
management tools and if they believe they are streamline business activity and therefore regulator will be reminded that it is healthy for
competent enough to do the job as predicted. maximise time effectively. competition, and the market as a whole, that
Whilst I’m sure they all have their individual When looking forward we, as an industry, are brokers remain in a situation where they can still
merits, to a certain degree lenders appear, slowly unfortunately still facing significant funding offer value to lenders whilst ensuring consumers
but surely, to be overcoming many of the concerns. Lenders will, and understandably so, get the best advice possible. Whatever the
liquidity challenges they have been facing in remain conservative in their attitudes to new outcome brokers need the support of lender and
regards to mortgage funding. I suggest the result lending with the quality of available credit distribution channels to ensure they can get
of this is that some of the initial heat seems to remaining a major concern. Control will access to the best available products for their
have gone out of the tranche management continue to be the key word in lender’s clients and we for one will continue to work
equation. vocabularies especially on the back of the recent hard to provide this.
www.mortgageintroducer.com December 2009 Mortgage Introducer
Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44