Precise started lending in the buy-to-let sector in May this year and is headed up by Alan Cleary, managing director, Ian Lonergan, chief executive, John Nixon, chief operating officer and Seb Maloney, chief financial officer.
The deal will give hope to other would-be lenders still waiting on the sideline such as Portillion, fronted by former GMAC-RFC ace Stephen Knight.
Cleary refused to be drawn on the amount of funding Precise Mortgages had raised to lend for its first foray into the residential sector but was delighted that the final hurdle had been jumped.
Back in May it was only a pipe dream that Precise Mortgages would be able to widen its remit into residential lending.
At the time Cleary said: “We’ve got backing to the tune of hundreds of millions not billions, with the opportunity to get more than that at a later date.”
Precise Mortgages is backed by Elliott Associates, the US-based equity house which provided Exact, the expert outsourcer - also fronted by the same team - with the finance to launch in 2008.
For the buy-to-let launch loans were planned to be warehoused by Precise Mortgages and sister company Exact would service those loans through to redemption.
Mortgage Introducer understands that all residential loans will operate in the same fashion.
Precise Mortgages is not reliant on wholesale funding or on retail deposits to fund its lending – a factor which City pundits say makes FSA authorisation all the more remarkable.
Back in May Cleary said that funding was matched to term which allowed the lender to hold loans for the full duration.
Precise Mortgages is not thought to want to chase volumes but wanting to focus more on quality.
The lender has had a mediocre start in the buy-to-let market, lending to high quality borrowers earning a minimum of £50k and with no adverse credit history. The maximum loan value has been £300,000.
It is as yet unclear how Precise Mortgages will market its residential offering to brokers but on its buy-to-let range the lender distributes through a distribution panel including L&G Mortgage Club, PTFS, PMS, Mortgage Intelligence and Mortgage Next, 3mc, TBMC, Mortgages for Business and Mortgage Force and it is thought this will continue with its residential range.
More importantly, Cleary is also on record stating that Precise Mortgages is “100% focused on the intermediary market and there will be no dual pricing”.
On its buy-to-let products Precise Mortgages works exclusively on valuations with surveyors Colleys, and solicitors, Shoosmiths and Goldsmith Williams. Mortgage Introducer understands that this will continue with its residential offering when it launches.
Ian Lonergan, CEO, Precise Mortgages, confirmed that it had been a very thorough process focussing extensively on the quality of the lender's proposition, including its compliance with the FSA’s requirements in relation to Responsible Lending and its ability to bring secure funding to the UK mortgage market.
Lonergan said: "We are committed to bringing new funding to the UK mortgage market and it’s fantastic to get the green light from the regulator. Our dedication to the intermediary market remains as we continue with our strategy of distributing exclusively through mortgage brokers."
Ben Thompson, director of mortgages for Legal & General, added: "I am delighted that Precise Mortgages has got the approval it needs from the FSA in order to start residential lending. This is great news for mortgage brokers and borrowers. Precise Mortgages has an excellent infrastructure and business model and I am sure it will bring much needed products to sectors of the market that have been starved of credit.”
Cleary said: "We will shortly be launching a new range of products for owner occupiers to complement our buy-to-let range. We also have plans to launch into new segments of the mortgage market early next year where we have identified good quality borrowers who have been starved of credit."
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