Magellan Homeloans entered the market at the start of August targeting borrowers with adverse credit who had suffered a financially damaging one-off event.
Now managing director Matt Gilmour has branded the broker market ‘fast asleep’ and too reliant on government backed Help to Buy and Funding for Lending mortgages.
Speaking to an audience at the Mortgage Business Expo in London, Gilmour urged mortgage intermediaries to help more borrowers with adverse credit access finance.
“There is a very active and very good near-prime sector and now we’re a sub-prime, heavy adverse lender that sits underneath that layer of near-prime and gives a much bigger arsenal of product providers for brokers to recommend to clients,” he said.
“The customer needs to know about it but only brokers are going to be able to tell them. Too many intermediaries are comfortable with low hanging fruit, selling Help to Buy and high street mortgages that have been fuelled by Funding for Lending. All of these things aren’t going to last forever. There is going to be a famine when they’re withdrawn.”
Magellan said it expected its rates, which are currently at LIBOR +8%, to fall in the near future but Gilmour said mortgage brokers needed to support the sub-prime market or lose out on business.
“What we’ve found is that the mortgage intermediary market, as far as our proposition is concerned, is fast asleep,” he told the crowd.
“Product innovation requires the support of the intermediary community. We as product providers know the customer is out there and if you won’t put it on the shelf for the customer then we will.
“We will go B2C. We don’t want to, frankly I don’t know very much about going B2C, but I feel so passionately that there are customers out there that deserve and want our products.”