What is Mortgage Talk’s background?
The two partners in Mortgage Talk, Steve Mansfield and myself, started the business in 1994.
I was an estate agent and had been one for nearly all my working life and Steve worked in financial services. We recognised estate agents were not very efficient in financial services, especially in light of the new regulations coming in.
Mortgage Talk gives estate agents the opportunity to concentrate on house sales, while still giving them a financial service arm within their company and, in our opinion, a more professionally run business.
Last year we hit around £200m in lending and this year we are on target for £350m. We put a lot of effort and time into administration and customer services which takes money out of the profitability, but the aim is to build a big franchise right across the country. We are looking at rising above Charcol’s business levels of £1.2bn to £1.3bn a year.
How do you differ from other intermediaries that work within estate agents?
We manage the people within the agency, but the agency pays the wages. We install our systems and bespoke software, interview and employ the necessary staff, offer training, and provide Mortgage Talk branding to run alongside the agent’s.
One of our other unique selling features is that we can open estate agents up to new-build business. We currently deal with around 16 new-build companies, such as David Wilson Homes, Bovis and Barratts. If an estate agent takes a franchise out with us we have a new-build manager who liaises with the builders in that estate agent’s area ‘ to get them into business.
What benefits do you offer new-build partners?
The benefit to the builder is the speed we work at ‘ we offer a guarantee to exchange in 28 days. We have been involved with new build for a while and because our computer system drives the administrator to update on a three-day basis, it pushes lenders into action. This helps us to get an exchange date on time.
We have a new-build manager that co-ordinates everything, so virtually all our new-build mortgages go through in 28 days and if they do not, then it is down to something out of our control. Builders like the fact we have total control ‘ they know exactly what is happening.
How are business levels in the new-build market at the moment?
The amount of business is unbelievable. However, in our area, a lot of builders have already sold their allocation until the end of the year. This is a slight problem as it means our leads are slowing, so obviously we are aiming to add more new-build companies to our portfolio. The new-build market is made up of quality clients as well, due to the type of people who buy new-build homes.
How do you source your mortgages?
We work with the Legal & General Mortgage Club, but occasionally we talk to other lenders and get a better rate, depending on whether we are packaging for them or not.
We have two other arms to the business: one is Mortgage Talk Direct, which is internet, telephone and mail-based, and we also have Red Mortgage Solutions which is our non-conforming arm, which packages for non-conforming or adverse business. We formed that arm of the business due to our involvement in the new-build market.
When we were outsourcing non-conforming business to other companies we found we did not have the control to guarantee a 28-day exchange. With adverse products, 28 days is not always possible, but we can flag problems up early and get a decision within two or three days.
What is your view on the imminent regulation of the mortgage market?
Virtually everybody in the company has passed their CeMaP exams and will be ready by the end of the year. How everything is going to pan out from 2004 is anybody’s guess at the moment.
Most companies in the industry are gathering information in order to take informed decisions on where to take their business and we are no different in this respect and are probably not much more advanced than anyone else. I don’t think it would be a bad thing if everything, including packaging, was regulated. Nor is it a bad idea to tighten up on those who can sell mortgages, or how they are sold, we already work to those standards.
Paul Robertson is a staff writer