You are here: Home - News -

M2000 pioneers loan auctions

by:
  • 01/09/2000
  • 0
Mortgage 2000 is to launch the UK's first mortgage auction system for brokers through its e-mortgage...

Mortgage 2000 is to launch the UK’s first mortgage auction system for brokers through its e-mortgage sourcing system and via its credit portal, financesupermarket.com.

Using a generic application form brokers will be able to submit their clients’ mortgage requirements to a panel of lenders, who within 48 hours will come back to the broker with their bids. Offers will be made using risk-based pricing and brokers will be able to sell products indiv-idually tailored to their clients.

So far 14 lenders have signed up to the panel, including Woolwich, Bristol and West and West Bromwich Building Society. But Mortgage 2000 expects this to have grown to 20 by the time of its anticipated launch in mid-September. Simon Nixon, chief executive at Mortgage 2000, said that the mortgage market is likely to continue moving in this direction. He said: “Profit margins are now so low that lenders will have to offer individual products in order to compete.”

With lenders currently offering a limited range of products there is cross-subsidy between high and low risk borrowers, but by offering risk-based products lenders will be able to offer deals based on the borrower’s individual circumstances.

Borrowers who might not qualify for a specific product may still therefore get a deal, as lenders will be able to cope with a wider spectrum of customers.

Nixon said that this could have a significant impact on the business written by lenders, with more high street lenders entering niche areas.

He said: “Lenders will either have to stop lending and start broking, like Bradford and Bingley, or diversify. High street lenders are missing out on self-certification, 100% and sub-prime business, and the market is getting so competitive that they cannot generate the required level of business from status lending.”

With true sub-prime lending carrying a high risk, most high street lenders will only be able to consider low levels of adverse credit, but other niche lenders may start to feel the pressure.

Nixon said: “Self-cert lenders may start to feel the squeeze since all lenders are likely to move into this area as it carries less risk than sub-prime.”

Tags

There are 0 Comment(s)

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.

Profiles

Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.

Marketwatch

Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.

Poll

Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
Read previous post:
Brand development can help build value

Funny things, brands. You want your brand to be perceived by your customers as having a specific set...

Close