This is the home of the packager and distributor, Complete FS. In recent months, hopes for mortgage lending have focused on smaller lenders. But, as these niche banks and building societies often lack the capacity to field broker enquiries, many of their products reach borrowers through packagers.
Brokers call Complete FS for different reasons – a client that doesn’t fit high street criteria, an interest in a product distributed exclusively. But while the challenge of matching a client with a mortgage may be obvious at both ends of the phone, the solution is not always clear.
Brokers can become preoccupied with an obvious client issue, such as a county court judgement (CCJ), according to Complete FS director Tony Salentino. “What they maybe don’t take enough information about are things like income. A broker may say: ‘The client tells me he has £30,000 but he’s got a CCJ.’
“Well, how is that £30,000 built up? Is it all basic salary? Is it a mixture of salary, working family tax credit, overtime, bonuses? Today, the most important thing for us to establish today is affordability.”
Some calls are more offbeat – mortgages for houseboats, self-certification and Northern Rock 120% loan-to-value mortgages have all been the subject of broker queries.
“Clearly we want the case to go through but we have a major responsibility to the lender to protect them from cases that don’t fit their criteria,” Salentino says. “Otherwise they’ll say, ‘With respect, what the hell are we using Complete for?’”
Building societies and smaller lenders work by the “three C’s” of capacity (affordability), collateral (security) and the applicant’s character. Thanks to this preference for manual underwriting, trusted packagers have an opportunity to advocate certain applications that might be automatically denied by a high street bank.
But the application has to be carefully put together. A lot of the work of packagers involves helping the broker avoid lender bugbears – incorrect forms, photocopied rather than original documents, internet bank statements which lack authentication from the bank.
“One of the issues we have with brokers is when we find out something that is not brilliant about the client,” says the company’s other director, Phil Jay. “It’s very important that the story is sold to the lender. We have got to have the three C’s and say, ‘OK, they had a little problem here, but they are really good here.’”
Complete FS takes up roughly one in three broker enquiries. Of those, 65% reach completion. The hazards most likely to sink a case are the difficulties associated with accurately showing an applicant’s income, and cases in which the property is down valued – although sometimes this can be averted on the weight of conflicting evidence collected by the packager.
When a case completes, the lender gives the packager a procuration fee, and in many cases stipulates how much will reach the broker. In the case of Complete, the broker’s cut ranges from a half to over three quarters of the gross procuration fee.
Like all parts of the industry, packagers suffered during the crash, caught in the middle between frustrated brokers and lenders pulling products, not to mention packager’s own cost concerns. Hundreds of packagers shrank to a dozen or so.
Since then, though, the industry has adjusted and Complete FS is looking ahead. “I hope it never returns to distribution,” says Salentino. “That’s part of what we do, but in the early nineties when we set up it was about preparing a case so that it met the lender’s needs and I think that’s what we should do going forwards.
“Our role really isn’t about distribution. It’s about gathering everything they need and giving it to the lender so they can issue the offer. The more times we can gather it, send it to them and they go to day one offer the more they’re going to believe that what we offer adds value. It’s not about me sending out 147,000 e-shots. The big value for us is the quality of what we do.”
Mortgage Solutions reporter Julia Rampen spent a day with Complete FS and its directors Tony Salentino and Phil Jay.
