Shawbrook opens up on second charge direct-to-lender routes

The bank said it was happy to discuss ‘direct agencies’ with intermediaries, or agree a contract between themselves as a lender and brokers to submit business directly.

The Mortgage Credit Directive, implemented on 21 March, placed a requirement on mortgage brokers to tell their remortgage clients there is an option to take a second charge or further advance.

This has led to some secured loan lenders opening up their distribution channels to allow, largely directly authorised (DA) mortgage intermediaries, to submit business directly rather than through the traditional master broker route.

This month, both PMS and Legal & General Mortgage Club have launched second charge lender panels for their DAs. Shawbrook said plans to join a mortgage club panel were under consideration.

Sales and operations director at Shawbrook Bank Maeve Ward (pictured), said there were various ways in which brokers can submit business to them depending on how much personal involvement they want with the deal.

“The key is to understand exactly what the broker is looking for,” said Ward, “of which there are potentially three options.

“Firstly the broker may want to own the process from cradle to grave taking responsibility for gathering the third party references, instruction of valuations and packaging the case for lender. The second option would be to own the advice only, creating the need to access tools and platforms which would allow them to do this, supported by training on the market and the lenders’ criteria.”

Ward said the final route would be to submit directly to the bank and it would request the third party references and instruct the valuations.

Brokers will be paid 1.5% commission irrespective of their chosen submission route. Shawbrook said the fees, which the borrower pays, will vary on the case because there was not always the need for a valuation or consent from the first charge lender. Its lender fee ranges from £495 to £1595 depending on the product chosen.