The move was revealed as part of a wider cull of the American investment house’s residential mortgage activities, with 1,000 jobs expected to be lost on both sides of the Atlantic; around 160 of them at Advantage.
The announcement ended widespread market speculation surrounding the future of the lender after it had drastically scaled back its lending activity in recent weeks.
In a statement, Anthony Meola, chief operating officer of US residential business at Morgan Stanley, said: “Given the continued dislocation in the mortgage markets, we have restructured our residential mortgage business to ensure we are appropriately positioned for the environment going forward.”
One source told Mortgage Introducer that an air of nervousness had gripped the company’s Cheshire base in the last few weeks.
Speaking before the announcement, the source said: “I keep in touch with people who have gone there and they are saying they are a bit anxious at the minute.
"They are seeing how little business they are writing at the moment and this is creating a lot of nervousness. The appetite for business just doesn’t seem to be there.”
However, commentators seemed unanimous that Advantage would not be the last lender to leave the market.
Phil Whitehouse, head of The Mortgage Alliance, commented: “It came as a bit of a surprise to us but it just shows if the ownership of the lender is not in its own hands, they have to accept the decisions made by someone else.
"However, you have to ask what happens now with a lot of other lenders who aren’t writing much business as the uncertainty this creates is not good for the market.”
John Malone, managing director of Premier Mortgage Services, concurred: “Obviously it’s very disappointing to lose one of your lenders and there are now some exceptionally good people in the labour market.
"However, I fear this market will be further swollen in the coming months as I see more lenders flowing Advantage out of the UK market.”
