Some second charge packagers refusing to use bank statements – Cleary

  • 13/09/2018
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Some second charge packagers refusing to use bank statements – Cleary
Second charge lenders have hit out at some distributors in the market for continuing to push back against regulatory requirements in the sector.


Precise Mortgages and One Savings Bank are not doing business through certain master brokers because of their refusal to obtain bank statements from customers.

They also noted that business done directly though brokers was much better quality and that some of the pricing was not representative of the lending risks involved.

Speaking at the Financial Services Expo, One Savings Bank sales director Adrian Moloney said: “We introduced bank statements and 99 times out of 100 in first charge you’re going to get asked for these as part of the process.

“What surprised me was certain brokerages within the community said that was going to be an issue in terms of recommending products if asked for those documents.

“So while it’s come a long way, it’s still got a long way to go to being in the same way as first charge market,” he added.


We’ll terminate agencies

Precise Mortgages managing director Alan Cleary (pictured) echoed these views, warning that the regulator would eventually catch up to the perpetrators.

“We write about 5% of that market but there’s still a lot of distributors and some lenders to their cost that have been ignoring the new rules that came in,” he said.

“It’s inevitable the MCD (Mortgage Credit Directive) says how it’s got to be done – you’ve got to get bank statements.

“Those distributors – and still I’m hearing it today saying ‘we’re not going to give you business because you want bank statements’ – well we’re going to terminate your agencies eventually.

“But they will fall foul of the regulator when the regulator gets around to seeing everybody,” he added.


We like direct business

Cleary confirmed that the lender was not writing any business with distributors failing to supply bank statements and praised mortgage brokers for their approach.

“We write about 25% of our business direct and we quite like that, it’s good, because the broker is quite used to getting the bank statements because they do it for the first charge, so there’s not really any change,” he said.

“So where we’re doing it direct, that’s cool. Where we’ve got involved with some master brokers there is push back still against the regulation.

“But it’s not all packagers, I wouldn’t tar everyone with the same brush,” he added.

Brightstar chief executive officer Rob Jupp echoed the importance of lenders accepting applications direct from brokers.

He agreed last year was a terrible one for the sector which was “inevitable” being regulated for the first time, but said it was makring really good progress.

“Fees have come down but the direct to lender proposition hasn’t taken off enough and is potentially quite damaging and dangerous if it doesn’t do that well [for brokers] choosing the most appropriate lender,” he said.


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