Almost half a century in the mortgage industry was not what Vic Jannels expected when, in August 1972, he walked into the offices of an executive recruitment firm in Birmingham and, just a few days later, joined Provincial Building Society.
Since that day Jannels (pictured with trophy) has probably witnessed just about everything the mortgage market has to offer as it evolved from non-regulated, to self-regulation, to the regulated entity that exists today. And not to mention two recessions.
He has also covered the full spread of roles within the sector, holding senior management positions with lenders, brokers and packagers – including two of his own businesses – and time as a trade body board member, looking after the interests of the packager fraternity.
So, back to the here and now, how does he see the specialist lending and distribution market in 2018?
“Specialist lending and the requirement for controlled distribution is not going to go away – a belief continually underpinned by the number of new lenders seeking entry into the sector,” he says.
“They’ve done their homework and are expecting to stay around, and you may well see some of the banks which exited during the credit crunch easing their way back in as well.
“This can only be good for the consumer with increased competition and potentially enabling them to access funds more easily than in recent times.”
He adds that these new lenders are generally preparing more thoroughly than in past times by researching in more detail the markets they need to reach out to, and how to handle their distribution.
However, these new lenders should be careful not to occupy too much of the same ground, he adds.
“There is, of course, a danger the market might be become over-subscribed with lenders looking to fish in the same pond,” Jannels continues.
“Will lenders consolidate? Potentially, and there may well be an argument that some of them need to come together simply to realise the benefits of their product strategies.
“But do I see shortening in number of lenders other than that? No, because the market is huge and growing by the month – there’s a pent-up demand that is fuelled by lack of property and this will help to keep the lending side growing.”
One of the most notable growth areas has been the adverse credit sector. Eyebrows may have been raised at the extent to which this is happening, but Jannels is content that it is necessary and lenders are generally coping with it well.
“We have to accept that a proportion of people will incur a level of [credit] disrepair at some point in their life and often through no fault of their own.
“Depending on the reason for that, I fail to understand any reason why, once they have resolved the issue and managed their affairs successfully for a while, they should not be brought back into the fold.
“I feel quite strongly that where somebody has gone through an unforeseen financial downturn, perhaps a redundancy or illness, it cannot be right to penalise them just because it might take six months or so to find another job or return to full health,” he adds.
However, Jannels views application processing times as an area where lenders could improve their performance with delays mounting at some and occasionally a lack of clarity leaving brokers and packagers stuck in the middle.
“We know of one lender that is currently 15 days behind for every interaction, so if the lender asks for an additional item then the 15 days delay starts again,” Jannels says.
He highlights the General Data Protection Regulation (GDPR) as a potential reason but notes that AToM began work two years out from the implementation date.
“GDPR hit everyone hard and, perhaps, some lenders harder than they thought it might so this might be a contributor to triggering these delays,” he continues.
“We were staggered how late a number of institutions seem to have been in commencing the more senior part of their GDPR processing,” he adds.
On regulation – Jannels believes it has generally been positive for the industry but needs to be better assessed, implemented, and where necessary, withdrawn.
“The client always seems to be overlooked in all regulatory changes and of course the ultimate increased cost of growing regulation will always be borne by them,” Jannels continues.
“I am not sure how often, if ever, clients are engaged in the process given that it is supposedly for their ultimate benefit. And when unintended consequences occur, as they do, the difficulty for decision makers is how they step back from it or make the changes to benefit all stakeholders?
“There is no shame in putting your hands up and admitting ‘we got that bit wrong and will make changes to rectify it’.
“The regulator would win a lot more friends if it would admit from time-to-time that it’s gone a little bit further than intended and makes a necessary adjustment,” he adds.
Packager trade body?
So with that in mind, is there a need for the return of a specialist distribution trade body to give strength to the sector’s voice and help influence regulation and policy making?
Jannels was one of the founders behind the former packager alliance PMPA and he also spent several years, pre-credit crunch, on the Association of Mortgage Intermediaries (AMI) board representing the interests of the packaging and distribution community.
“I’m not convinced there is the need for another association or alliance of packagers as we already have a voice with several distributors being represented on the various advisory boards at AMI,” he continues.
“Given that AMI represents the industry particularly well and has a voice with the regulator and Treasury, that should be meaningful enough. The problem with any new association is that it would need to be funded as you need to employ high quality, independent people.” Could it be funded by members or lenders as was previously the case?
“I see that as one of the potential stumbling blocks for any new association. That’s not to say it won’t happen, but I suspect it’s less likely this time around,” Jannels adds.
What then of the future for AToM, the business which he set up in 1991 and is still going strong today?
With a positive future predicted for the specialist market, Jannels believes the need for distribution and packaging of cases is unlikely to dissipate anytime soon.
This is likely to prove a boon to AToM and other packagers, although he suggests we will also see new entrants try to break into the space, with mixed levels of success.
With the growing influence of technology in mortgage sourcing, advice and processing, AToM took its own leap introducing its own CRM system two years ago which has since evolved significantly.
“The idea was to produce an all singing-all dancing CRM system for our brokers, introducers and clients, and we were surprised how quickly introducers began to take notice,” he says.
“It seemed like it was a bigger tool than AToM needed just for itself, so we took the decision to make OMS a standalone CRM system and a standalone company.”
It is already integrated with several specialist lenders to allow straight-through processing of applications with no re-keying of customer data and has five more lenders scheduled to be announced later in the year.
“There are conversations going on, not just with high street banks but in the building society and challenger bank world too, which is where we’ve made several two-way application programming interfaces (APIs) already,” he continues.
“Ideally we’d like to get all of the specialist lenders on board and progress from there.”
A little emotional
Finally, with the business remaining largely a family affair Jannels is now able to step back a touch, so what does that mean on a personal level?
He has “unofficially” retired two or three times but finds it difficult to completely step away.
“I am currently trying to work just three days a week and having just celebrated my 72nd birthday, I’m getting to the point where I am comfortable that my sons, Dale and Neal, are more than capable of taking the business forward,” he says.
“I can start planning how else to spend my time though and I would be interested in a couple of non-executive directorships as I can never imagine becoming a full-time house person.
“I still have a couple of matters to resolve before I fully retire so watch this space,” he adds.
Jannels is looking forward to spending more time with his wife Sheila and their six young grandchildren.
He also credits Sheila for her significant role in the success of AToM after managing the finances, staffing and helping to build its reputation through her dedication.
“It has been something of a phenomenal experience,” he says.
“I have been lucky enough to meet and learn from some amazing people and in hindsight I can’t think of anything I would have preferred to do with my life.
“In saying this, I am not immune from a little emotion,” he concludes.