Pepper plans new proposition after completing largest securitisation yet
The £425m securitisation deal comprised first charge mortgages and was the third to be issued under the lender’s Polaris banner.
Laurence Morey, chief executive at Pepper Money (pictured), said it received “very strong support from a wide range of investors.”
“We’re now in an exciting position to plan further growth of lending,” Morey added.
“We aim to take our robust and inclusive approach to lending to new propositions, including affordable home ownership, over the coming weeks and months.
“We have already launched products to help a wider range of customers, such as our cashback offering for those wanting to consolidate debts,” Morey said.
“The strong investor appetite for this securitisation is testament to the high quality assets that we generate, thanks to our exceptional team, which throughout the pandemic remained focused on delivering for customers,” he added.
The Polaris deals are separate from Pepper’s series of three Castell securitisations, which have been completed on second charge mortgages.
Know Your BDM: Chloe Bowden Davies, Pepper Money
What locations and how many advisers and broker firms do you cover in your role?
I cover the North West region, which includes all brokers from Carlisle down to Wolverhampton.
How have you changed the way you establish and maintain a good relationship with brokers in the pandemic?
I pride myself on always returning calls within a timely fashion and making sure I provide the correct answer to enquiries. This hasn’t changed during the pandemic.
I frequently do virtual visits with my brokers, especially key brokers and new registrations, to get them up to speed with the Pepper proposition and any changes that we make.
What personal talent/skill is most valuable in doing your job?
I like to think that I’m very approachable and friendly, and this helps me to build excellent rapport with brokers.
What personal talent/skill would you most like to improve on?
The ability to push back. I sometimes find I take on things that I don’t necessarily need to get involved in, so I can deliver excellent service to my brokers.
However, other departments are just as capable of doing this, so I need to learn to let go a little more.
Where would you rather be stuck, in bumper-to-bumper traffic or back-to-back Zoom calls?
I think a bit of both. I must admit I can’t wait to get back out meeting all my brokers and building that face-to-face interaction again.
Zoom will still be needed though and has been a great way to meet brokers in areas of the country we may not get to visit as often as we would like.
What’s the best bit of career-related advice you’ve ever been given?
Always strive to deliver the best service you can and always push yourself to be better. Never think you know it all because the likelihood is you don’t.
What is the most quirky/unique property deal you’ve been involved in?
The ones I really enjoy getting involved with are the ones who have had a life event and had lots of issues on their credit file who think they can’t get a mortgage. When I say ‘yes’ they are over the moon and the broker is happy they can help their client.
It makes it all worthwhile especially if it’s complicated and they think they are stuck.
What has been your lockdown coping strategy?
Going to our caravan in North Wales on the weekend. During the drive down on a Friday I can feel the stress levels fall away and then I get to relax ready for the next week.
If you were head of the FCA for the day, what would you change about regulation in the mortgage industry?
I’m not sure I’d change much in the way of regulation, but I’d like to see more done to educate customers about the mortgage options available to them and the benefits of professional advice.
What was your motivation for choosing business development as a career?
I really enjoy helping people and solving problems. I also enjoy building relationships with lots of different people.
If you could do any other job in the property sector, what would it be and why?
I would give valuations ago. I think it would be interesting seeing lots of different properties in different areas.
What did you want to be growing up?
I wanted to be a criminal solicitor and have a law degree, but once I finished university decided that it wasn’t something I wanted to pursue further.
What’s your favourite face mask design/pattern to wear?
I have lots of different ones each to match a different outfit.
And finally, what’s the strangest question you’ve ever been asked?
Would you lend on a house made of hay bales… Obviously, that was a no.
Pepper Money launches cashback mortgage range
The cashback feature is available for remortgages on the Pepper 12 to 24 ranges and has been designed for borrowers looking to consolidate debt.
The Pepper 24 line of deals, which are open to borrowers who have had adverse credit registered over the last 24 months, is now available up to 85 per cent loan to value.
Interest rates start from 4.45 per cent and are completion fee-free. Cashback of £500 is available on completion.
Paul Adams (pictured), sales director at Pepper Money, said: “We’re really excited about the launch of Pepper Money’s first ever cashback mortgage. Many customers experienced financial difficulty during the pandemic, leading to missed payments and increased debt.
“With our cashback mortgage, the customers now have a great option to consolidate those debts with the cashback available to assist with the payment of disbursements that are often required during debt consolidation.”
Around 56 per cent of self-employed renters feel mortgage lenders aren’t doing enough
According to research from Aldermore, which surveyed 1,000 self-employed adults in May, just under a third thought that mortgage lenders fully understood their earning capabilities when they applied for a mortgage.
Around 50 per cent said they thought their lender only partially understood, with 21 per cent saying that their mortgage lender did not understand their earning capability at all.
Just under a third of those surveyed also said that the main reason they were rejected was because they were self-employed.
The research also showed that factors such as increased difficulty in saving for a deposit and credit scores deteriorating due to the pandemic also had a negative impact on their attractiveness to lenders.
This has led the majority, around 64 per cent, to believe that the self-employed are treated worse by lenders than those with a salary, and over a third stated that buying a home feels out of reach right now.
However, some were more determined to buy a home than ever, with 20 per cent of those surveyed saying they were motivated to buy due to their lockdown experience and over a quarter saying they were actively saving for a deposit.
Aldermore’s head of mortgage distribution Jon Cooper said: “The UK is an entrepreneurial nation, and the growing self-employed workforce is integral to our economy, so it is disappointing to see persistent barriers for them when seeking to secure a mortgage, which appears to have been exacerbated by the pandemic. “
He said that self-employed borrowers should not despair as there were an increased number of specialist lenders who were more adept at understanding complicated income streams, therefore allowing self-employed borrowers more options to get on the property ladder.
Confidence in specialism
This was echoed by Pepper Money’s sales director Paul Adams, who said: “It’s disappointing that so many self-employed people have such little confidence about their prospects of getting a mortgage that accurately reflects their earnings, but we can use this as an opportunity to educate people about the importance of professional advice.
“Specialist lenders, like Pepper Money, are well-equipped to individually assess self-employed income and that means they can often establish a truer picture of their affordability. For brokers, it’s important to have access to a good range of different lenders as this will give them the best chance of identifying the right solution for their customers.”
Poole Family Financial’s director Matthew Poole said that the figures were not surprising as there is an “assumption” from self-employed borrowers that it would be more difficult to secure a mortgage.
“As long as you are completing your tax returns accurately and on time, which shows a true reflection of your earnings then there is no reason the self-employed shouldn’t access mortgages as easily as the employed population,” he explained.
He said that a “tricky” aspect with self-employed borrowers was that there was variation between lenders on how they assess income, which can create some confusion, but therefore using an adviser is vital.
From a criteria perspective Poole said that most lenders wanted to see the latest three months of trading to make sure trading was in line with or higher than pre-Covid-19 trading, and most used filed tax returns which could negatively impact some clients.
Poole concluded: “From a lender perspective it’s hard for them to do anything differently really as criteria can change at any time so they wouldn’t want to promote this too much, as what is correct today could be completely different tomorrow.”
Mansfield Building Society’s head of mortgage sales Andy Alvarez said: “If you look at it from a self-employed perspective it is no secret that it is harder to get a mortgage than it was 18 months ago and that is down to the way some lenders view government support and how they view change in income as well.”
He said that there was still appetite for self-employed mortgages, and that it would take one or two lenders to widen their criteria and then lenders would start “trickling through” and writing more business.
Specialist mortgage cases will give brokers longevity in market – Pepper Money
Speaking on a Pepper Money video debate hosted by Mortgage Solutions, sales director Paul Adams said although complex cases were not the easiest to place, they would prove a broker’s worth in an era where clients were becoming more independent.
He said: “In this digital age, it’s becoming easier for a normal, vanilla, prime customer looking for a remortgage to self-serve. They can go to their bank, do a product transfer, remortgage online. Certainly, there’ll be some of those customers that will choose to do that.
“By brokers stepping into the specialist market and becoming more expert with these scenarios, I think it holds them in good stead for longevity in the future.”
Adams also said the way lenders in the specialist sector operated was more transparent and helpful to brokers.
“In the specialist market, lenders usually operate in a way that brokers would want,” he said.
He added: “By that I mean the ability to speak to the decision maker. So, we’ve set our stall out to make sure that brokers can talk to our underwriting specialists about every application they submit. In actual fact, the first thing that happens on submission is we’ll call the broker because we want to start the journey with a full understanding of the scenario.
“It’s much easier to do this type of business than people would think.”
Danny Belton, head of lender relationships at L&G Mortgage Club, said: “There’s been a perception for a long, long time that to do a high street case will take X amount of time, to do a specialist lending case will take a lot longer. Technology is now in place to reduce that and actually bring it all together.”
Watch the video below [12:44], chaired by Victoria Hartley, group editor of Mortgage Solutions, featuring Paul Adams, sales director, Pepper Money; Stephanie Charman, head of strategic relationships, lender, Sesame Bankhall Group and Danny Belton, head of lender relationships, L&G Mortgage Club.
Brokers should use social media and websites to attract internet-reliant customers – Pepper Money
A survey by Pepper Money found that while 55 per cent of people asked family and friends for mortgage broker referrals in autumn, that number dropped to 37 per cent in March this year.
Meanwhile, searching for brokers online had become the preferred way to find advice, cited by 56 per cent of respondents.
Speaking on a video debate in association with Pepper Money, Stephanie Charman, head of strategic relationships, lender at Sesame Bankhall Group said: “We have become a nation potentially that defaults to online before anything else.”
She also said people probably preferred to speak to brokers already armed with information.
Charman added: “You’ve also got younger generations that actually want to have an informed conversation but want to do their own research first.
“So, they’re going into that conversation, that discussion, possibly with a mortgage broker prepared and more aware of some of the solutions that are on offer.”
“Customers are going to use online research and the web is a default position. Make sure that your website talks about everything that you do. If you’ve got referral arrangement in place, mention those too,” she said.
Watch the video below [9:52], chaired by Victoria Hartley, group editor of Mortgage Solutions, featuring Paul Adams, sales director, Pepper Money; Stephanie Charman, head of strategic relationships, lender, Sesame Bankhall Group and Danny Belton, head of lender relationships, L&G Mortgage Club.
Intermediaries can lead in push to remove stigma around adverse credit – Pepper Money
Speaking on a video debate hosted by Mortgage Solutions, in partnership with Pepper Money, the mortgage club’s head of lender relationships said customers researched options online and panicked when calculators showed they would be rejected for a mortgage.
Pepper Money’s recent adverse credit study found that while 52 per cent of adults wanting to purchase a home in the next year were worried about being rejected for a mortgage, just six per cent of those who actually applied were turned down.
Belton said: “I generally think there is a role for intermediaries to become more visible. And be more visible in channels that customers actually use on a regular basis. Whether that be the likes of Facebook or other social medias.”
He said people would usually speak to family and friends about their credit worries and then be referred to mortgage brokers who could help. However, with people being less connected due to the pandemic, Belton suggested brokers position themselves on online platforms where concerned clients may be.
“I do believe online channels are the first port of call. This then leads to brokers having good quality websites,” he added.
He said updated web systems also helped brokers to keep in touch with existing customers who may have had a change in circumstances by asking them how they were and if they needed help.
Paul Adams, sales director at Pepper Money, acknowledged there was a lack of understanding amongst consumers.
“It’s the very reason why we do the adverse credit study. We want to promote this by social media channels, we take it to the national press as well for coverage.
“It’s a perception gap. People are very embarrassed to talk about credit issues,” he added.
Watch the video below [6:38], chaired by Victoria Hartley, group editor of Mortgage Solutions, featuring Paul Adams, sales director, Pepper Money; Stephanie Charman, head of strategic relationships, lender, Sesame Bankhall Group and Danny Belton, head of lender relationships, L&G Mortgage Club.
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More than half of house hunters fear bad credit will scupper plans – Pepper Money
Pepper Money’s latest adverse credit study revealed that 52 per cent of adults with poor credit fear it will stop them from buying a home.
However, these fears have been dampened since last autumn when 69 per cent said their credit history would hold them back.
The study also found that only 6 per cent of homeowners who did have adverse credit before buying their current property said they were turned down for a mortgage.
Pepper Money says borrowers incorrectly believe that once they have experienced a credit issue they will ineligible for a mortgage for many years.
Three quarters of respondents said they knew what a County Court Judgement (CCJ) was, however, almost a quarter said they thought they would have to wait longer than five years to apply for a mortgage after being registered with a CCJ.
Some mortgage lenders will offer deals to borrowers who have been registered with a CCJ six months ago, however, the further in your past the missed payment, default or CCJ is registered, the lower your interest rate will be.
Paul Adams (pictured), sales director at Pepper Money, said: “This research is a mix of good news and bad news. It’s great that customers with adverse credit are generally more positive about their chances of getting a mortgage. There is, however, still a significant perception gap and areas of misunderstanding about the opportunities that are available for customers with more complex circumstances.
“The good news is that this presents an opportunity for mortgage brokers to help raise awareness and understanding about the options available, and this can help them to reach more customers and build trust.”
Affluent people equally at risk of falling into bad credit as those worse off – Pepper Money
Speaking on a Mortgage Solutions video debate in light of Pepper Money’s adverse credit report, the lender’s sale director there was an “even split” between those who were well off and those who were not.
Adams said: “There’s lots of preconceptions that run the report and I think that’s it’s such an interesting read. One would be that adverse credit is much more prevalent in less affluent social groups, but it’s a relatively even split.
“That would indicate missed payments are not necessarily about people not having the means to meet their commitments, but often life gets in the way.”
He added: “Another consideration probably is that the more affluent you are, the more lines of credit you have and therefore you have more opportunities to slip up.”
Watch the video below [12:30], chaired by Victoria Hartley, group editor of Mortgage Solutions, featuring Paul Adams, sales director, Pepper Money; Stephanie Charman, head of strategic relationships, lender, Sesame Bankhall Group and Danny Belton, head of lender relationships, L&G Mortgage Club.