The interview
“We are trying to focus strongly on the intermediary, looking for unique angles that the intermediary can take to their customers and new ways of doing business, rather than the tried and tested old ways of pile ‘em high and sell ‘em cheap. It’s about innovation.” Some of that innovation comes from Platform’s newly formed management team, which includes Peter Stimson, former commercial director at Checkmate Mortgages, and John Kilgallon, former head of mortgages at Abbey, both of whom now work alongside Tweedy and Lee Gladwell, the firm’s business development director.
opporTuniTieS Tweedy says that although the market is in a tough place right now there are plenty of opportunities. “I think brokers are cottoning on to the fact that it’s important for them to provide best advice to their customers. And in this environment, which is unstable and where interest rates may go up, people are worried. It’s therefore a prudent product to be offering people at the moment because it’s offering security and not flipping customers every two years.” Tweedy says there is a fundamental shift in the way that the intermediary channel is operating following the recession.
“For most of the introducers we work with the mortgage is not as important as it was three years ago. It’s not to say it’s not important, because it is, it’s just that intermediaries are engaging more and are thinking much more long term about financial planning holistically - there’s less pure mortgage broking.”
innovaTion Tweedy is excited about the direction Platform is moving in, with innovation taking centre stage on the product side of the business. He wants to re- evaluate pricing strategies and so far, the management team has come up with a way of “rewarding” lower risk borrowers who may traditionally have picked up the bill for higher risk customers. “The other product we’ve just
introduced is a joint application mortgage,” he says. “When we looked
36 mortGaGe introducer JULY 2010
into the risk profile of our lending we found the risk profile of our borrowers who were single applicants performed less well, not badly, but less well than borrowers who were joint applicants.
“By looking at the two types separately
we were able to give joint applicants a benefit. It’s a much more granular approach to pricing for risk, which is something that we’re trying to do more of; to look for opportunities to give brokers something to talk to their customers about and give them a unique proposition. “Historically, as an industry we have priced our mortgages so that we get a return on capital which reflects a blend of joint applications and single applications,” he explains. “Rather than pricing at the lowest common denominator, which is a weighted average of the two (single and joint), we’re saying that if you’re a joint applicant we’re going to give you the benefit of being a lower risk customer, and we can give a slight rate reduction off our blended rate. It’s a core part of our prime offering.”
“The sole rate stays the same and isn’t
correspondingly higher, it’s just a benefit for joint applicants,” he goes on to say. “We’re trying to take a fluid approach to underwriting that’s individualistic to each type of business, which we think is the way forward.”
almoST prime
The talk of the mortgage town has of late centred on what is generally being called “complex prime”. Lenders including Kensington and Aldermore have recently launched into the market catering for prime borrowers who may fail high-street banks’ credit scoring because of historical payment problems, which have now resolved.
Platform is also playing in this market
and offers its borrowers what it calls “almost prime” which will accept borrowers who have had clean credit for 12 months, but who might have had a missed payment or arrears before that. Credit scoring comes into the process but applications don’t stand on that alone: “It’s a two stage underwriting process. The decision in principle is electronic but the amount of information that we gather at the DIP stage is enough that if
the paper backs up what’s submitted on the DIP that decision would stand. Every single application is manually underwritten once it comes in.” Tweedy is insistent that although the
product caters to people with credit issues in their past the quality of business is maintained.
“The almost prime product is very
clean, it’s not like historical Platform adverse so it doesn’t allow any late mortgage payments in the past 12 months,” he says. “It’s a product for people who apply to us because they haven’t passed credit scores.” Tweedy is confident that the almost prime product has a promising future. “The sub-prime part of the market is growing and the number of products available to service that part of the market has shrunk. I think those types of products will start to increase in the future, my view that is the industry will see the opportunity.
“The key thing to lending to those type of people is to make sure they have the ability and the willingness to pay and I think that’s where the industry, in the UK and the US particularly, forgot about the assessment of ability to pay through the self-cert, fast-track products that we saw – NINJA mortgages etc.
“I think a sensible level of complex prime will come back, but right now the funding is so constrained that it’s a natural tendency for lenders to lend to borrowers who represent the lowest risk. “But the sector of people with some financial difficulties in their pasts is getting bigger and as and when the timing is right, we may expand our proposition to borrowers who do have the ability to pay and who got into difficulty through no fault of their own. I would stress though that we have no plans for that right now.” He is reluctant to predict the future shape of the market but would like to see more debate around the position of self- employed people in the mortgage market. “I think there’s an interesting debate to be had because self-employed people’s accounts by definition are not easy to understand, whether you’re talking about British Airways, British Telecom or Bob the plumber, there are complex issues of tax relief that make income hard to pinpoint.”
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 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52