to work with lenders that are trying to innovate. “We’re talking about mortgages


for the self-employed, those who may struggle in the current criteria environment to prove their income stream. Secondly, clients who have a once-in-a-lifetime negative event such as losing their job and while they find another job their credit rating takes a battering. They fall below the super- prime that lenders are looking for but not because of financial negligence. I don’t define these borrowers as sub-prime. They’re maybe credit repair customers.” Jupp is passionate about this group of


people. “Those who have started their own


business in the past three years have found it much harder to get a mortgage and the number of people setting up as self employed has almost doubled in the same time,” he says. “There is a whole backlog of decent clients currently stuck in mortgage poverty who can’t move. This group of people is big. Politically they can be a vote winner - they are absolutely key to the government’s re- election in four years time. “The cynical side of me says, in


periods of austerity with rising inflation and costs of living they are getting really quite fed up with being forced to stay in the rented sector and the fact that they’re being ripped off by rising rents. As a nation culturally we are still a property- owning group of people. That will take a generation to change, if at all.” It’s a point not lost on the vast majority


of the mortgage industry. But it’s all very well saying these people want and need a mortgage. It’s quite another persuading a lender to give them one.


acknowledgemenT “The sad reality is that at the moment


for every hundred customers out there, there will be 60 for whom there simply isn’t a product or solution,” he admits. “But there are 40% where there may be a solution. We believe within that group there are customers who wouldn’t have got a loan who we’ll be able to help.” Jupp is also keen to underline that Brightstar won’t stop there. In its role as consultant, he says Brightstar plans


not only to grow its own share of the specialist market but also to help support the wider growth of this market as well. “In a healthy market you need competition. Once you have that momentum follows,” he says. “We have to challenge the risk curve all the time to try to create that competition to kick start the market. “Even the most risk averse people


would say that where we are now – a super-prime market with 60% loan to value and below mortgages for people with exceptional credit scoring is not right. Where we were before is not right either but there is some middle distance.” The reason for this risk appetite isn’t


because there isn’t safe money to be made lower down the risk curve but that there is a finite amount of money available to lend. Lenders take the top tranche of risk – with cherry picking the safe option in today’s market. “Prime lenders have the most


significant role in the economy at the moment but specialist lenders, such as Kensington, Precise Mortgages, Aldermore and iGroup are of more interest to me. “I also think there’s also a growing


appetite among regulated bridging lenders to get into the mainstream residential market. “Drawbridge and Tiuta both have real


ambitions to step up their organisations and get involved with residential regulated mortgage lending. I don’t know if they will or not but there is no reason why they can’t. Masthaven is another which has just got Financial Services Authority authorisation.” Brightstar also has plans to have a


more strategic relationship with its lender partners. “Lenders that have a bit of funding and


are looking for somewhere to channel that can access our intelligence so they understand more specifically the sort of demand that’s out there,” says Jupp. “If lenders don’t have specialist experience we can help them to understand the risk curve much more clearly. As well as to see the type of lending they should be doing to get low risk and high return. “We speak to lenders all the time and get involved in developing products that


fit the existing demand. That brings me back to those 60 people who we couldn’t help the first time around. We retain their details and monitor the market so that if and when a product becomes available that fits them, we can get in touch with them to sort something out,” he says. “That provides another way of helping


brokers do more of the business that comes across their desks.”


Broker To Broker Jupp is clear that Brightstar is committed to working with intermediaries for as long as there is an intermediary market. “We’re trying to help brokers make money now where perhaps they couldn’t before or didn’t have the knowledge to,” he says. “It helps them to survive and us to survive.” And the all-important question? Show


me the money. “One of the first things we ascertain


when we are working on a deal is what the broker’s earning expectations are,” explains Jupp. “Some deals will be more straightforward than others to get through and we feel our remuneration should reflect that. Similarly there will be some really complex deals that could take a couple of days solid working. “There has to be a fair and equitable


split between ourselves, the broker and the client. We will agree the fee split according to the deal on a percentage of proc fees and/or other fees depending on the product type.” The customer relationship remains


with the introducing broker, says Jupp. “The advice will still come from the adviser as it should do, though our team are all FPC and CeMAP qualified. The main difference between us and our competitors - given the very fine line about who can give advice - is that we have a professional indemnity policy that says if we don’t do our job properly and we give incorrect information that causes the broker to have a client complaint, then it’s our neck on the line, not the broker’s. “We’re not looking to use that as a


safety net at all and it’s costing us a lot of money to keep that in place. So we’ll make every effort to make sure we do everything right,” he says.


mortgage iNtroducer MARCH 2011 33


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