Future Mortgages has announced its intention to refocus its mortgage range and make inroads into the prime market.
The sub-prime lender aims to widen the spectrum of its products to incorporate the mainstream market, while retaining the majority of its sub-prime market share. It has released its first product in this sector with its Future 85 Lite self-certification mortgage.
Richard Hurst, communications manager at Future Mortgages, said: ‘This is our first tangible change since being bought by Citigroup two years ago… Before joining with Citigroup we did not have the backing, but now we can take a pragmatic stance with regard to targeting bigger markets, and begin to compete with the high street.’
Southern Pacific Mortgage Limited has also moved into the mainstream, and John Prust, sales and marketing director, said: ‘In the broker/packager-introduced mortgage sector, the distinction between prime and non-conforming lenders is breaking down. Our packagers can now use SPML for the full range of borrower credit profiles, which will help them to improve operational efficiency and enhance their own service standards to customers.’
Rob Clifford, managing director of mortgageforce, noted many sub-prime lenders had built up good broker relationships and expects more to exploit these relationships soon.
He said: ‘What better way than broadening the product proposition? It is not just about a new product, it is a different way of doing business. But, the prime market is fiercely competitive and is service and price-driven, whereas in sub prime the competition is in underwriting policy and product criteria. Once you compete with prime lenders you must be prepared to be beaten up on price and service.’
Future mortgages will allow a minimum of adverse elements, such as one county court judgement of up to £500, over six-months old and arrears of no more than one month, again with no deterioration in the last six months, on the new products.