Perceived wisdom in the mortgage industry would tell you that one of the upsides of the financial crisis was how it forced out some of the less reputable brokers in the industry.
Yet when an application flashes up from a broker (who shall remain nameless) looking for a 100% mortgage for a client with a clearly patchy credit history, you wonder if that wisdom is true.
That’s the type of submission that still finds its way to All Types of Mortgages, where managing director Dale Jannels spends part of his week sifting through applications like these, trying to find the genuine brokers with good cases.
“That’s an example of the rubbish still left in the market,” he says. “It’s just a waste of time for our guys, but thankfully there’s not many like this these days.”
With its offices nestled between London and Brighton in the picturesque market town of Horsham, AToM began life as a typical mortgage brokerage but by the mid-1990s had expanded to take in a packaging business which deals with cases that other brokers can find difficult to place with lenders.
It’s this unique position in the market which Jannels says means the firm can relate to brokers in a way that usual packagers cannot.
“We see what brokers do on a day-to-day basis. We understand a broker’s hassles.
“We know that brokers are having trouble with cases you would call ‘complex prime’ at the minute, that’s the biggest side of our business right now because so many cases are falling apart because they have a tiny fault or need to be looked at from outside the box.
“But back in the 00s we diversified, that means if one side of the business goes quiet we can use the packaging side to make sure we’re okay. Diversification in a few areas is something I would recommend.”
With mainstream lenders targeting an ever shrinking pool of ultra-prime customers, Jannels says that brokers will have to adapt to using different lenders to get more of their deals through.
“We had a mortgage the other day which was for a property owned by a trust fund, it needed a £70,000 mortgage and was at 30% LTV, yet no high street lender would touch it. There was zero chance the borrower was going to default on that mortgage yet you couldn’t place it with most banks.
“There are lots of gaps appearing in the market which non-high street lenders will exploit. The attraction for some of these lenders is that they can also charge a premium.”
Jannels arrives at the office around 7.45am and says brokers usually start phoning from around 8.30am. While the office closes at 5.30, Jannels himself is often around until 8pm, looking through cases and trying to get back to advisers.
“No two days are the same. It can be quiet all day and then late in the afternoon you get half a dozen cases come in, but we try and get back to everyone within a day which sometimes means finishing late.”
Consultant Sue Allen is the first point of contact for many brokers calling AToM, manning the phones at the front of the shop. She told Mortgage Solutions: “We appreciate that a broker is only as good as the information their client has given them.
“A common one these days is for clients to say they’ve never taken out a loan but when you dig a deeper you see loads of payday loans cropping up. A customer sometimes doesn’t understand that they are loans but we need to get it right on day one because assumptions cause problems.
“We get lots of calls with slightly unusual cases, the ones where if brokers aren’t doing them on a regular basis they might not know where and how to put them through.”
AToM’s office in Horsham town centre is open for business six days a week and Jannels adds that even for brokers who can’t afford their own premises, they must seize every opportunity for promotion.
“One bit of advice I’d give to brokers is to contact your local newspaper and see if you can get involved in writing a column and get some free promotion that way. I’ve had something in our local paper every week for years now and so many people come in and say that’s how they know us.
“Try and get involved in the community too, for Halloween we took part in a trick or treat promotion in the town centre and had 200 people through the door on Saturday. Of course they won’t all equal sales but it’s so important to get your brand out there and plant that thought.”
Upstairs at the former Halifax Estate Agency office is John Stanfield, in charge of compliance at the firm. He says that processes at AToM have been overhauled because of increased scrutiny from the regulator.
“Training is so important, we have a weekly CeMAP quiz to keep our advisers on their toes and it’s so important to keep yourself familiar with the rules.
“A big issue right now is clarity. We try not to bombard customers with information but it is so important to be clear. People are often really confused about things like credit footprints so I encourage our staff to make sure everything is set out so the customer understands.”
Each customer who talks with an adviser is given an eight point checklist which outlines what services AToM provides and the costs associated in an easy-to-understand fashion.
Jannels says its making potentially difficult things easy is the key to success at AToM, and with hopes of expansion in the medium term, finding homes for difficult mortgage cases appears to be a profitable path in the ever-shrinking mortgage world.
