LSL pulls out of Countrywide takeover

LSL pulls out of Countrywide takeover

 

In February, the two estate agents confirmed they were in talks regarding a merger which would include LSL’s financial service brands network Primis and club The Mortgage Alliance (TMA). At the time, it was said there was no certainty that an offer would be made. 

In an update released today, LSL confirmed it did not intend to make an offer for the property group. 

Countrywide said it had been seeing the benefits of its turnaround plan with “continuing operations having returned to growth in profitability”.  

It also said it had seen positive public sentiment in the early part of 2020, reflected in strong agreed sales ahead of company expectations. 

The board said it remained confident in the strength of the business as an independent company. 

 

LSH deal collapse 

This news comes just days after Countrywide’s attempts to sell its commercial real estate subsidiary Lambert Smith Hampton (LSH) also fell through. 

In November, the firm was sold to John Bengt Moeller, chairman of American real estate company Great Global Holdings, in a £38m deal which was subject to shareholder approval. 

The sale was approved on 20 January, however, Moeller failed to complete the transaction by the 11 March deadline despite Countrywide stating it had made several efforts and revisions to the timetable to get it done. 

Countrywide is continuing to engage with Moeller to complete the deal and is also looking at alternative options for the sale of LSH. The firm is also considering seeking damages and costs for the delays caused by Moeller. 

It said it was in discussions with another potential seller who expressed interest in the real estate business during the delays. 

Countrywide said it would update shareholders in due course. 

TMA adds Just to equity release panel

TMA adds Just to equity release panel

 

Just is the fifth addition and joins Hodge Lifetime, OneFamily, More 2 Life and LV=.  

TMA members will have immediate access to the lender’s Just For You lifetime mortgage product which is available to retirees aged 55 and over, and gives borrowers the option to take a cash lump sum or release cash as and when needed from a pre-agreed facility.  

Clients are also able to move onto an interest roll-up option after starting with interest serviced. 

Lisa Martin, development director at TMA, said: “We have seen the lifestyle options and priorities of both over 55s and retirees change over recent years. Advisers are therefore increasingly hearing from a growing number of older borrowers looking to make the most of the equity tied up in their homes.  

“We will continue to enhance the TMA proposition to make sure our members are equipped with a variety of solutions to support the growing numbers of later life borrowers, whether these be standard mortgages, retirement interest-only mortgages or equity release products.”  

TMA members’ clients will also benefit from no affordability checks and the option to make partial repayments, in addition to the following:   

Stephen Lowe (pictured), group communications director at Just, added: “This is a major growth area as people turn to the wealth in their properties to better meet their lifestyle aspirations in retirement and to support other family members.  

“We look forward to working closely with TMA and the club’s adviser community to provide innovative lending solutions that will help more homeowners make the most of their property assets through their retirement years.” 

Five key points to becoming SM&CR ready – TMA

Five key points to becoming SM&CR ready – TMA

 

SM&CR will replace the Financial Conduct Authority’s (FCA) existing Approved Persons Regime and comes into force from 9 December. 

Lisa Martin, development director at TMA said while there was still time for firms to get ready, it was “essential” that intermediaries got up to speed on the requirements as a “matter of urgency”. 

She said: “We understand that many firms are feeling daunted by the new regime and still aren’t sure how to prepare for it. The best approach to ensuring compliance is to break the changes down into digestible chunks and tackle them one-by-one.” 

The expanded scope of the regime will place more responsibility and accountability with senior managers and other individuals working in almost all authorised firms – and mortgage advisers will account for a large proportion of those affected.

TMA is encouraging intermediaries that have not yet taken the necessary steps in order to prepare for SM&CR to complete their final preparations now.  

Martin added: “It is in advisers’ best interests to understand the new rules and find the simplest and best possible route to preparing for them before the December deadline approaches.” 

 

What needs to be done

According to TMA, there are five key areas advisers need to address ahead of the deadline:  

 

Advisers warned to ‘sit up and take notice’ of incoming SM&CR regulations – Accord podcast

Advisers warned to ‘sit up and take notice’ of incoming SM&CR regulations – Accord podcast

 

Speaking to Jeremy Duncombe, director of intermediaries at Accord Mortgages on its latest Growth Series podcast, Lovell said many of the firms he had made contact with were yet to start working on preparing for the changes which come into force on 9 December.  

He said: “Some have taken the time to sit around a table and hatch a plan and decide what to do. But we’ve got to bear in mind now, we’re just over four months away from the implementation date so firms need to sit up and take notice.” 

He advised firms to “read up” on the requirements and recommended larger ones create a document or project team while suggesting that smaller firms look at templates online, read the Financial Conduct Authority (FCA) guide and use other online resources. 

Lovell added: “What we believe is going to happen is the FCA will write to all firms and ask them what type of firm they are: limited firm; core firms and enhanced firms with 35m worth of intermediary income. That has an impact on what you have to do.” 

For the Senior Management Regime, existing senior managers would be automatically converted onto the new regime and Lovell advised senior managers to create a statement of responsibilities, ready for inspection on 9 December. 

The Certification Regime will be subject to qualification requirement and Lovell said it would hold senior managers accountable as it would be based on whether senior managers deemed certain individuals as “fit and proper”. Conduct rules will be applicable to all staff. 

Lovell concluded: “Invent the right culture in your business as soon as possible.” 

 

TMA teams up with the Source

TMA teams up with the Source

 

The Source, an online quotation system which lets intermediaries compare and sell GI policies, will be available to all TMA members.

It offers guaranteed quotes on buildings and contents, as well as landlord property insurance, from a panel of more than 20 insurers.

These include AXA, Aviva, Ageas, RSA, Legal & General, Amlin, UKG, LV, Zurich, Modus, Landlords Choice, First Assist, Bright, Sentinel, Zurich, Pen and Plum.

The addition of The Source is the latest development in TMA’s bid to enhance its insurance offering, following the news last year that Uinsure was joining the GI panel.

 

‘Real value’

Jackie Wassall, corporate relationship manager at TMA, hailed the range of products offered by Source and commented: “We aim to deliver a service and proposition that adds real value for our members.

“It’s so important that advisers have access to the best protection and GI product offerings to meet the demands of each individual client.”

He added that TMA will continue to broaden their insurance offering throughout 2019.

Brian Coulton, head of intermediary at Source Insurance, believes his firm will help TMA members to grow their businesses.

He said: “TMA offers a great proposition as well as ongoing CPD based education programs to their members, aligning perfectly with our own mission.”

How the role of packagers is changing in specialist lending

How the role of packagers is changing in specialist lending

With this changing landscape of growing regulatory and product complexity, Specialist Lending Solutions asked about the evolving role of master brokers and packagers in specialist arenas.

Dale Jannels (pictured), All Types of Mortgages (AToM) managing director said the increasingly specialised market means packagers are “coming back with a vengeance”.

Jannels told Specialist Lending Solutions that packagers’ value lies in specialist knowledge of how lenders operate, and the distribution through broker channels to push specialist products – arguing that their expertise gives them a unique position to place complex deals.

“You ask a lender what’s the conversion rate from a broker compared to a packager, I guarantee ours would be double what the broker’s is,” he said.

“We know how to deal with lenders on a day-to-day basis, we know what they want, what they will and won’t accept.

“Lenders are realising the value that packagers bring to the market. We’re saving time and effort, everything is tickboxing a quicker referral.”

A matter of time

On top of the expertise, brokers simply do not have the time to scrutinise specialist cases, Jannels continued.

“You’re under a lot of pressure as a broker to get things through, because that’s going to put the bread and butter on your table at the end of the month,” he said.

Jane Benjamin, head of relationship management at Sesame and PMS, added: “As mortgage business has become more complicated to advise on and process, mortgage advisers have been weighed down with time pressures.

“There are only so many hours in a day, so if something is outside of an adviser’s comfort zone then it could be in everyone’s best interests for that customer to be referred on to a specialist.”

Stick to their knitting

However, while David Copland, director of TMA Mortgage Club, acknowledged the utility of packagers to deal with niche cases, he cautioned against their over expansion, saying packagers should “stick to their knitting”.

He said: “As the market began to come back [after the credit crunch] the risk-rewards equation began to change, and as competition returned to the market lenders began to look for niches that would return them a good margin.”

“My worry is that [packagers] all seem to be expanding into other fields, which is great if they have the specialist personnel on their team, but dangerous if they are branching out too early.”

Copland added that packagers could improve by clarifying the area of client hand-off, and defining who is responsible for the advice, or where it is non-regulated.

Impossible to cover it all

Jo Breeden, managing director of Crystal Specialist Finance, said that packagers provide a net for covering all bases in a growing and complex market, but it was not for the lack of skill from brokers.

“The market is now much more diverse, so by turning to a specialist distributor the broker can ensure they have covered all bases,” said Breeden.

He continued: “I don’t think it’s so much that brokers lack the expertise, simply that the market is so large and varied that it is almost impossible to be an expert in everything all the time.

“The client is looking for a solution, the broker’s job is to find that. A specialist distributor widens that product offering meaning a full service can be realised.”

The Mortgage Lender confirms distribution partners

The Mortgage Lender confirms distribution partners

The soon to be launched specialist intermediary-only lender is partnering with SimplyBiz Mortgages, Paradigm Mortgage Services, The Mortgage Alliance, 3mc and Residential Home Loans.

Product details will be revealed shortly, with a range that will focus on underserved borrowers, while also addressing lending into retirement and mortgages for the self-employed.

Bob Hunt, chief executive of Paradigm Mortgage Services, said: “The Mortgage Lender has a market leading proposition backed up by slick underwriting and a comprehensive broker portal. We’re pleased to have been chosen as one of its limited number of mortgage club launch partners.”

The Mortgage Lender is headed up by former Mortgages PLC boss Trevor Pothecary and will include David Newman as chief financial officer, Hugh Meechan as chief operating officer, Pete Thomson as sales and marketing director, and Alex Cameron as chief administrative officer and general counsel.

Thomson said: “We’ve been working hard behind the scenes in the run up to our launch and have discovered a huge appetite among mortgage clubs, networks and distributors for a new lender that will challenge the market and provide a better deal for customers.

”Announcing our mortgage club launch partners is the first stage of us making those products available to the market.”

First Complete rebrands TMA mortgage club

First Complete rebrands TMA mortgage club

TMA, which has been rebranded in First Complete colours, is embarking on a series of measures to improve its proposition based on consultation with members. As well adding more lenders to its panel and running events, it plans to continue its mortgage helpdesk and face-to-face business development manager support.

First Complete and TMA mortgage manager Karen Hedges said: “TMA has been a part of First Complete for more than a year now so it makes perfect sense to bring the two brands closer together.

“The first things that people will notice will be the change in brand colours and a change in the website, but members will soon be able to benefit from some changes to what we offer them.

“We have taken on board what people have said to us, we know they love the exclusive products and personal service that we provide and, with the backing of First Complete, we can now work to put further changes in place to make things better still.”

First Complete bought TMA, one of the country’s largest mortgage clubs, in 2011 to connect with directly authorised intermediaries.

Proc fees paid on both volume and quality on horizon – Embley

Proc fees paid on both volume and quality on horizon – Embley

Quality will continue to be a key differentiator for mortgage lenders, but the property firm’s boss said “at some point we will see proc fees paid on a quality – volume basis.”

Outlining the with group’s strategic plans to the network’s award winners, he said LSL’s mortgage distribution was currently the third/fourth biggest in the UK and lack of scale was one of the reasons other networks failed to make money.

“We looked at so many networks between 2004-8 and the biggest premiums were being paid for loss-making distribution businesses. That hasn’t changed much,” Embley added (pictured).

First Complete’s growth continues with the recruitment of 50 new AR firms in the last six months and another 100 going through the pipeline and LSL is still very much on the hunt for “opportunistic acquisitions,” said Embley.

“If you say that, you could end up overpaying, but we look very carefully at all our potential assets,” he added. Alongside LSL’s multi-million pound income the group has a £75m acquisition facility sitting with the banks, giving the firm acquisition “firepower,” he said.

With LSL’s results out on 28 February, Embley said First Complete moved into profit for the first time this year, adding he was “hugely optimistic” about First Complete and LSL’s joint future.

LSL’s mortgage and protection distributors include First Complete, Pink Home Loans and Linear Financial Services, alongside mortgage club, The Mortgage Alliance, its latest acquisition.

How not to get blacklisted by lenders

How not to get blacklisted by lenders

Phil Whitehouse, head of The Mortgage Alliance (TMA) offers a steer on keeping away from trouble.

Firstly, the main reason for removing a broker from a panel will be a suspicion of doing something dishonest or making a serious error of judgement either because they haven’t done the right checks or because they have been caught out by a third party.

In the worst case scenario, it may only take one dodgy case for a lender to blacklist you. Many lenders won’t take the risk of continuing to take business from someone they believe has put through a fraudulent case – regardless of whether it has been put through intentionally or because the proper checks have not been done.

If a case is intentionally fraudulent then the person submitting it deserves to be blacklisted. The more unfortunate cases are when you have missed something or have been misled by a third party.

It is crucial therefore that you know the third parties that you’re using and how reputable they are. Do a thorough due diligence on any third party and don’t take anything on face value, particularly for introducers. In general it is shrewd to use a selection of third parties; for instance if a solicitor or conveyancer that you use exclusively turns out to be ‘a bad apple’ you could well be deemed guilty by association, even though you personally have done nothing wrong.

Make sure you are in the strongest position possible by being up to date on all the latest information, such as money laundering rules, compliance and lender updates. A good mortgage club or network will provide you with this information through email and leaflets, road shows or seminars so take advantage of them. Make sure you are aware of the checks that a lender and the FSA expect you to carry out and read the information you are sent as it will contain crucial updates that you need to be aware of.

It will add to your understanding and make your life easier if you get to know the lenders you deal with as well as possible. The more you can understand the conditions that they are operating under and what they need from you and your clients, the better position you will be in when it comes to meeting those requirements and the less likely you are to inadvertently put yourself in a situation where they no longer want to work with you. Similarly co-operate with lenders if they ask you questions and be open and upfront; the more you can do to develop a cooperative relationship the better it will be for you.

Also, take an active interest in the quality of your business – seek feedback from your lender contacts on how your business quality stands up; you will usually find them very willing to share information with you plus what you can do, if necessary, to improve the quality.

There are very serious implications of being blacklisted, often with hidden consequences.

If you are removed from a lender’s panel, you reduce the number of lenders that you can deal with diminishing your clients’ choice; if this means you can’t offer your clients the mortgage that they want then it may well drive them to a different broker who can offer a wider range.

If the offence is really serious, then other lenders may also remove you from their panels. The network or club you are a part of is also likely to carry out its own investigation and may exclude you as they will have to make a decision on whether they still want to work with you or whether it will tarnish their own reputation. If these things happen then you could effectively be put out of business.

Be aware of the implications of the various anti-Money Laundering and Financial Crime regulations. In some circumstances a broker would not be warned if they are under investigation as it could be considered that they have been tipped off. A tip off is an offence in itself so organisations cannot be as open as they may like to be and brokers could be struck off without warning and with rare chances of appeal.

There have been a number of examples of brokers being removed from lenders’ panels where they were careless or naïve. To avoid this:

• It’s your livelihood that’s at stake here, so have high standards that you put in place for every case, don’t cut corners even when you’re really busy, and it goes without saying that you need to be straight and honest in everything you do.

• Try to see every client where possible, as you’ve got more chance of seeing if anything’s going wrong when you meet face-to-face than purely by post or over the telephone.

• If something looks too good to be true it probably is so be suspicious. Follow your instincts so if something looks a bit dubious, always check it out.

• Make sure you’ve got detailed records that are up to date that you can refer back to if necessary.