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Magellan launch sparked adverse credit online buzz

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  • 03/09/2013
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Magellan launch sparked adverse credit online buzz
Magellan Homeloans’ website received more than 1200 unique visits from brokers on its first day in business, the lender reported.

The heavy adverse credit lender, which launched a pilot on 5 August, said its distribution partners had also reported high volumes of telephone enquiries about the possibility of loans to borrowers with adverse credit histories. 

Managing director Matt Gilmour said: “Magellan’s launch inevitably raised concerns about a return to sub-prime lending of old, but I can assure brokers our proposition is very different.

“Our philosophy is that we’re less concerned about the amount of adverse credit a borrower may have accumulated in the past and are more concerned about what they have done to resolve their past difficulties and how well they have been able to manage their finances over the last twelve months.”

However John Charcol’s senior technical manager Ray Boulger questioned the interest rates on the products. In a Mortgage Solutions Marketwatch on the issue, he said: “Once its launch portfolio has enabled it to test its systems I suspect Magellan will have to cut rates to get the volume it is likely to want.”

Magellan offers five products, each directed at a different level of credit impairment. All products have an interest rate of LIBOR + 8%, at time of writing 8.55%.

Sesame, Intrinsic, IN Partnership, Pink Home Loans, First Complete, Homeloan Partnership, Mortgage Advice Bureau and The Whitechurch Network are among the mortgage networks included in the pilot, which the lender plans to expand.

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