Lenders shouldn’t use second charge distributors who are reluctant to supply bank statements like in the first charge market, a panel argued at the Financial Services Expo in London yesterday.
The panel, which included Adrian Moloney (pictured), sales director at One Savings Bank, parent of Kent Reliance, Alan Cleary, managing director of Precise Mortgages and Rob Jupp, chief executive of Brightstar, seemed lukewarm on the current state of the second charge market.
Moloney said: “What did surprise me was some of the feedback we got when we introduced bank statements, which 99 times out of 100 in the first charge market you are going to get asked for as part of the process.
“Certain brokerages within that community said that it would be an issue for them in terms of recommending products if you asked for those documents.
“Whilst it has come a long way in the second charge market it has got a long way to go in terms of being in the same way the first charge market is.”
Alan Cleary said the market has gone sideways and if this was a school report he’d give it a “C+ at best”.
He added: “MCD (Mortgage Credit Directive) says how it’s got to be done – you’ve got to get bank statements.
“Those distributors, and I still am hearing it today, who are saying ‘we are not going to give you business because you want bank statements’, well we are going to terminate their agencies eventually.
“But they will fall foul of the regulator when the regulator gets round to seeing everybody else in the market.
“We just don’t supply business with them, it’s as simple as that. You supply bank statements or go to an unregulated lender.”
Rob Jupp then said: “If a distributor is asking you not to provide bank statements there should be no contemplation about thinking of kicking them off the panel – you should do it.”
While the second charge market is worth around £1.2bn annually if it gets its house in order the feeling is it could be much bigger.
Louisa Sedgwick, director of sales, mortgages at Vida Homeloans, who was also on the panel, told brokers who are unsure about which second charge master brokers to use to look at the firms networks list on their panels.
She said networks will have done due diligence and the firms will have a flat fee scale.