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COMPLEX PRIME AND ALMOST PRIME OR IS IT SEMANTICS? AC: I think there’s prime and then there’s everything else.


WHAT’S APPETITE LIKE TO LEND TO PEOPLE WITH IMPAIRED CREDIT? IG: We don’t credit score everything but we are restricted by the regulator by the amount of that type of lending we can do. GL: At the moment we have a product and a policy and do look for people who we can rehabilitate and are on their way to getting back on track but we’re unable to find that mould of people. I think part of the issue is that if you say that we’re going out to look for it you’ll just get a deluge of it from everyone. Equally there’s so much being done by larger lenders under the radar an I’m struggling to get sufficient volume to fill the amount I have allocated. I’m looking for ways to tread into that market which don’t open up floodgates. IG: I’m awash with cash. I have no funding difficulties whatsoever. It’s finding the right borrowers to lend to at the right price. That’s the key. AC: Clearly there is a funding problem in the market. Institutions who have access to funding may have completely different scenarios and then it comes down to finding the customers. We did a lot of research talking to mortgage borrowers about what they think and clearly there’s a consumer confidence problem. There’s


a lot of customers out there who think they can’t get a mortgage because they got a late utility bill or phone bill. There’s probably a lot of people out there who we could lend to but aren’t forthcoming because they just think things are worse than they actually are. LS: From our own experiences the key thing is that when we’re basing out individual assessment on a customer we look at the three key areas of affordability, risk and credit worthiness.


SO IS THERE A PROBLEM ACCESSING BORROWERS? IG: At the right price. Because you have idiots in the marketplace who are taking business on at ridiculous rates and ridiculous margins and creating margin squeeze. Examples are like Skipton in the first half of 2011. They wrote five times the amount of business than usual.


ARE LENDERS LENDING TO THIS TYPE OF CUSTOMER AND IT’S JUST THEY’RE NOT TALKING ABOUT IT? AC: High street lenders are. Our biggest competitor in near prime is not a near prime lender or specialist lender, it’s a high street lender that takes a view and does a stack of it. GL: Is that with manual underwriting then? AC: No, if the customer hits the score with the right LTV, they’ll do it. They’ve stopped doing it now which has impacted our volumes in a positive way. They could come back though and move


their boundaries like lenders do depending on their volume aspirations.


DO YOU THINK BROKERS ARE AWARE OF THE OPTIONS THEY HAVE IN TERMS OF CREDIT IMPAIRED? AC: It depends on what they want to do. I do a lot of marketing and at big road shows and expos I still get asked “are you a packager?” or “What do you do?” If you’re in that space and you’re interested, you should probably take interest in those types of products. If you’re not in that space and you’re not bothered then you don’t take any notice. IG: There are lots of brokers out there who, if the case proves to be too difficult, put it under “too damned difficult”. They don’t work hard for their client.


AC: It may not be rewarding enough. I hear that the proc fee for 10 Halifax deals will be more worth their time as specialist lenders decline more and various other factors.


Dale Jannels: A lot of brokers think there’s a lot more work involved and there blatantly isn’t. It’s just like doing a high street case except it’s not online and there’s someone manually looking at it. A lot of people really don’t understand adverse either. A broker will come to us and not understand why high street lenders won’t take a case because it’s got a CCJ on it. AC: That’s great for you isn’t it? It’s come full circle where packagers and distributors actually have a significant





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MORTGAGE INTRODUCER MARCH 2012 35


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