The firm made the announcement at a secured lending panel debate hosted by Precise in London yesterday.
Ryan McGrath, chief executive of The Loans Engine, said the firm launched its Mortgage Credit Directive-ready systems on 21 February and since then it had been working on a project to change its operational processes. Its objective is to offer an application system similar to a process first charge brokers would be familiar with, resulting in its business model change.
The firm revealed its decision after Mortgage Solutions asked McGrath if the master broker business model was soon to become obsolete as distribution channels widened post-MCD, allowing direct access to second charge lenders.
“There is a place for master brokers but they have to sort out their pricing,” said McGrath. “I get that they are wedded to their current pricing but if they can sort out their operational processes to make them similar to first charges there will always be a place for them in the market.”
He added: “Master brokers do need to look at themselves and review their models and fees because there are a whole bunch of first charge brokers who will need support when offering second charge loans. Unless master brokers sort out their fee models, that won’t happen.”