Twenty 7 Tec Group, backed by Verso Capital, was formed by James Tucker in August 2013. One month later it teamed up with Mortgage Advice Bureau to build a back office sourcing system for intermediaries. When the partnership was formally announced the following February there was a sceptical reaction to the proposition – do we need another sourcing system?
The market didn’t appear to pay it much regard and with one network, which had a stake in the business, as its only distributing partner it could be forgiven for not seeing the firm’s potential straight away.
Tucker’s career began with stockbroking which led him to consultancy work for Verso, a venture capital firm, which had a passion for investing in small UK tech firms involved in markets which are in a state of change. It gave Tucker the idea for Twenty 7 Tec and with the support and experience of Verso, the firm was born. Its strategy was to bring new technology to a market in a state of transition towards European regulation and between offline and online technology.
The firm was able to build an online mortgage application and sourcing system from scratch without legacy issues which complied with the Mortgage Credit Directive, a development which caught the eye of the regulator. “The FCA [Financial Conduct Authority] came to see us 18 months ago to talk about the Mortgage Credit Directive,” says Tucker. “They wanted to discuss the importance of technology for the MCD and how we could produce the ESIS [European Standardised Information Sheet] or KFI [Key Facts Illustration] top ups. They listened to a lot of what we said.”
Mortgage Source, the group’s mortgage sourcing system was launched in September 2014, and has been slowly gaining traction among the networks. Home Loan Partnership chose Tucker’s system two months later with Personal Touch Financial Services joining in January of this year. These networks were former users of Trigold’s sourcing system making Trigold the main supplier of Tucker’s broker clients so far.
The bigger challenge and arguably the one which the industry appears to be least prepared for is the requirement that brokers tell their clients about the option to take out a secured loan instead of a remortgage. Second charge lenders will have to use the ESIS in line with mortgage lenders creating another technology conundrum.
Loan Source is Tucker’s solution, a second charge sourcing system which allows brokers to compare the cost of taking a second charge with a remortgage. Again, a development which piqued the interest of the FCA. “They’ve just been to see us,” he says. “They wanted a demonstration of our technology and how you can compare seconds to remortgaging and they played around with the bridging tool while they were here.” Tucker is not pretending to be the only second charge sourcing provider on the block but he says they are only ‘independent’ one, the reason, he adds, for the FCA’s interest in his firm. “There is no question around bias when using our system that a second charge loan is the best option over a remortgage because we are not brokers of either.”
He estimates that by the end of 2015, 75% of specialist packagers and secured loan brokers will be using the system.
From offline to online
The company’s show stopper is yet to come. For the last 18 months the whole market has been working on integrating systems which have previously stood separately to make things easier for brokers, and Tucker thinks he’s cracked it with Mortgage Apply. He describes it as a web-based common application submission portal, which in layman’s terms means that the broker keys in the client details once and because it is an online system the information instantly updates the lender’s site. “This is the most relevant thing that anyone in this market can do at this time,” says Tucker. “If we can make this work it will take us from being a £5m business to a £50m business.” I ask him if he’s aiming to be number one.
He says: “Obviously we’re aiming to be number one but a lot of what we’re doing is dependent on the Mortgage Apply platform and networks supporting us with that process.”