Lenders expand second charge direct route

Last week, Tenet became the latest network to open up a direct-to-lender route for second charge mortgages. Since second charge mortgages moved into the same regulatory sphere as first charges in March, the reliance on specialist master brokers has become less prominent.

Precise Mortgages was one of five lenders to join Tenet’s direct panel, along with Masthaven Secured Loans, Paragon Personal Finance, Shawbrook Bank and Step One Finance.

Managing director Alan Cleary said this is Precise’s fourth such relationship, following those with mortgage clubs L&G, Simply Biz and PMS. He predicts that direct business will increase. “We will have ten by the end of the year,” he said.

“As a result of MCD, second charges look pretty much like first charges for most products, processing and distribution. In first charge we have both packaged and direct business so we are emulating that for second charge. It’s about choice – we’re not dictating to anyone how they can do business.”

Martin Porter, head of lending for Step One Finance, agreed that this route was likely to expand and said the lender was in early discussions with others, pending its experience with Tenet.

“It’s the first network we’ve partnered with on a direct-to-lender panel. We’ve had to change our procedures to accommodate the model but we are happy to consider other partnerships and look at ways we can widen our distribution,” he said.

Like Cleary, he predicts that some will still choose to use specialist master brokers and prefer not to give advice in this area.

He said: “Some may still want to go to the master brokers, perhaps more for the packaging. We try to accommodate packaging requirements and have taken on board things such as valuation and settlement figures, which they are not used to getting – but there is a balance in this of how much we can do. Brokers still have the responsibility of giving the advice and getting the information from the customer.”