Mortgage Introducer understands that Mortgages PLC has recently invested in revamping its front end lending systems and one well placed industry source says that there have been recent rumblings about the lender coming back to the market.
Mortgages PLC has been operating as a servicer of its non-conforming loan book since 2008, when its then parent Merrill Lynch closed its doors to new lending. Merrill Lynch was subsequently acquired by Bank of America in September 2008, just days before Lehman Brothers collapsed.
Mortgage broker Dean Mason of Herfordshire-based Mason’s Financial Planning, said it would be welcome news if Mortgages PLC does return to the market.
He said: “Another lender would be good news, but the main question is what type of lending they would be doing when they come back into the market.
“If you look at similar lenders which have come back to market recently, Platform have become mainstream and Kensington is doing some light adverse. Mortgages PLC was always an adverse lender with a bit of self-cert, which they clearly can’t do now.
“If they decide to market themselves as a mainstream lender, they’ll have to find a niche.”
He added that what the market needed was another lender which catered to those individuals who had suffered some minor credit problems through no fault of their own, but who had nevertheless been adversely affected by the recession.
He said: “There are more customers out there with adverse credit histories than three years ago, and those problems are often minor. But they have effectively been completely excluded from the mortgage market. It would be good to see another lender in that sector and I’d be interested in what sort of levels of risk Mortgages PLC would be lending at.
“If they were to do half the risk levels they were doing two or three years ago, that would seem sensible. I definitely don’t think it’s a good idea to offer heavy adverse, but the industry does want to help those who have suffered some misfortunes and need to get back on their feet.”
David Sheppard, managing director of London-based Perception Finance, agrees.
He said: “Mortgages PLC coming back to the market would be fantastic. The biggest problem I hear lenders talking about, ironically, is the lack of competition.
“Any lender coming in would be good news. For clients who can’t fit with mainstream lenders and particularly for the self-employed, there’s still a big gap in providers. It would be nice to see some lenders who would cater for those people who are being shut out through no fault of their own.
“Mortgages PLC always had a reputation for non-conforming lending, and I think that a lighter version of non-conforming is where their market could be.”
Bank of America declined to comment.
