Both SPML and Preferred brands ceased new business activities as of close of business on 2 April 2008, with packagers given 30 days to complete all pipeline deals.
In a statement to intermediaries and packagers, Simon Hinshelwood, managing director and chief executive officer at Lehman Brothers Mortgage Capital Business UK & Ireland, said: “We are determined to ensure that this process is conducted professionally and that any disruption to your business is kept to a minimum.”
The news was met with dejection from many in the industry, with SPML and Preferred key players in the non-conforming and packager markets.
Danny Lovey, sole trader at The Mortgage Practitioner, said: “The latest announcement about Preferred and SPML is very significant and a defining moment in the market. It could be the straw that broke the camel’s back in terms of the non-conforming market.
"Every packager used to deal with those brands and there are supposedly many packagers out there who are struggling already. Is there hope for the future for them?
“Some might decide to throw in the towel, as things don’t look set to improve. The ramifications of this could be that Armageddon is coming as far as many packagers are concerned. It is a sorry state of affairs.”
Rob Jupp, managing director of Personal Touch Packaging, said: “I’m devastated as two really well established brands have gone and I believe that this is the most significant loss of the liquidity crisis.
"From a Personal Touch Packaging perspective, less than 1 per cent of our business in March was with Lehman, so business has gone down but it is a loss.”
The future of Lehman Brothers in the UK mortgage market is unclear. The company said it would continue to service the loans which had already been originated but it denied rumours that both brands could return under the one name.
Alistair Neale, external communications manager at Lehman Brothers, said: “There are rumours everyday about every business and every brand and this is simply just another one. We never comment on any rumours.”
