Norwich Union Mortgage Club (NUMC) is currently the fourth biggest in the UK, purporting to have between 6–7,000 members, which brokered £8 billion of mortgage applications during 2003.
Following the acquisition of Prudential’s mortgage club, Premier Mortgage Service (PMS) Ltd, Bankhall have also formed a strategic alliance with Paymentshield in February this year.
James Evans, spokesman for Norwich Union, said the insurer had never considered applying for Principal status, which it said, would set it against its own partners in the mortgage industry.
Bankhall said its interest was ‘scale’ not distribution.
“It would be crass of me to assume100 per cent of NUMC membership will come across to join our services, said Bankhall’s group sales director, Sean Godfrey.
“We won’t be inviting applications until after the 30 April when the FSA’s ‘minded to authorise’ letters go out and neither should any other network,” he added.
On the valuation of the mortgage club, Godfrey said: “NUMC made money in the same way that Premier makes money and the amount we paid for the business reflects those benchmarks of profit, access to distribution and the number of other bidders after the club. NUMC has a staff of over thirty which will bring a huge amount of broker relationships to Bankhall.”
Godfrey disregarded talk of a distribution monopoly in the mortgage market.
“What we will have is a situation where with any lender we will automatically be their biggest customer. Therefore, any terms agreed will be beneficial to all, particularly our network members,” said Godfrey.
Broker, Paul Smith, director of Provident Solutions Ltd, an IFA and independent mortgage broker, based in Leicester, said: “The purchase of NUMC in addition to the purchase of Prudential’s PMS will lead to a substantial reduction in choice for mortgage brokers and IFAs wishing to take advantage of enhanced procuration fees.
“It is surely only a matter of time before Bankhall either charges a levy or reduces proc fees for brokers who are not part of its network. Let’s hope that Legal & General don't sell their mortgage club to Bankhall.”
