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Lunch with the mortgage men - BDI Home Finders

Talking finance

I want to be at the forefront of what is happening in the lending world and reading press releases from mortgage lenders doesn’t cut it for me, I want to hear it from the coal face. I want to know the reality of what is going on out there and whether getting a mortgage is getting any easier and ways in which I can help my clients get one. I also want to know what they think needs to be done and whether they agree with a line that trips off my tongue a lot, ‘Getting a mortgage is easy.. if you don’t need one’.

So I invited myself to lunch with the gentlemen from Coreco, City based Independent Mortgage and Financial advisers. Matt Lowndes the MD manages the team and Andrew Montlake a hands on broker who also heads up PR & Marketing (Monty to his mates).

Monty is pretty well known for talking all things mortgages on radio and TV as well as blogging and tweeting voraciously.

Diet Coke is ordered by Matt who isn’t drinking until the football season starts ’allegedly’. Thankfully Monty upgraded my ladylike house white to a large and joined me. The sighting of a leggy, hair flicking Apprentice star at the next table caused a little stir but I called proceedings to order with one of my special looks.

They and a few other senior industry colleagues started Coreco, in order to, in their words, ’do it properly’. Having decided to start up, they needed City premises. These were acquired one friday night by Matt, with the swipe of a personal credit card and a whispered ’don’t tell my wife’. They started April 2009. The worst, lowest, dankest month in mortgage and housing market history since the fun and games of the 1990′s.

‘So’ I ask. ‘What’s happening out there?’ I am fully expecting a plumber style whistle through the teeth, but get a somewhat more positive response.
‘There are many more products coming onto the market now and some of the fixed rates are astoundingly good. Also, the buy-to-let deals around are looking very good too’.

I push back. Ok, Ok. Products are all well and good but can anyone actually get them?

‘A steady job and below 75% loan to value and frankly it is much more straightforward than it has been for the past couple of years’ says Monty, ’But you’re right, there are still a lot of issues for people who’s finances are not straightforward, even if they can technically easily afford the repayments’.

What needs to be done to make things easier for people? I ask and thus open the flood gates of passion. They both lean in closer and faces get serious.
‘Firstly’ Says Monty.

‘The criteria set by the Lenders is a catch-all with little opportunity or willingness to bend. Perfectly good, low risk applicants are being turned away due to inflexible criteria’.

‘Nobody, especially us, wants to go back to the crazy lending of before’ says Matt, ‘but it has swung too far the other way. There should be more willingness to look closely at individual circumstances rather than rely purely on tick-boxes. A dollop of common sense needs to be applied more often’.

‘Also, there is a real issue with ‘Mortgage prisoners’. People who took self-cert mortgages and others whose circumstances have changed. They want to downsize and port their mortgages or move to a long term fixed but their Lenders criteria often makes this impossible. These people will end up defaulting instead of being allowed to manage it sensibly right now’ Says Monty. ( I personally know many people in this boat and frankly it’s so dumb an attitude by the Lenders, I am incredulous).

‘…and and and’ says Matt. ‘We need to make it easier for Bank of Mum and Dad to help their children onto the housing ladder. So many want to but it’s not as straightforward as it should be. There should be more affordable 90% products and interest only should not be vilified as being unsuitable for all borrowers. *takes a breath* We need more education around this subject, it is stopping people taking out interest only mortgages when it is the only way many can afford the loan’.

What else irritates? I ask.

‘People not getting a good deal because they are not getting proper advice’ says Monty. (My sensors are up for any infomercial style address starting but we’re OK). The mortgage market is not a level playing field.

How?

Most banks and Building Societies can only offer their own limited line of products. A particular five year fixed may be the right thing for that person but if the bank doesn’t have that product, they can’t be offered it. It may be in the small print but it needs to be made plainer that many places can only offer what they have, not what is best for that individual’.

I agree with this. My heart sinks when clients come to me saying they are only going to talk to their bank about financing and I swiftly march them in the direction of a decent independent broker who can give a full market offering and a second opinion.

On that note I mention I had seen some nice young men in his office. ‘Our apprentices’ they tell me. ‘We recruit from school, pay them and put them through college’. ‘Ooh’, I think, grow your own mortgage brokers, how terribly green.

‘And’ continues Matt, ‘we think it is criminal that kids come out of school not knowing anything about debt, credit cards and mortgages. Too often they end up learning the hard way. There needs to be a programme in schools to address this and we are aiming to do our bit towards this’.

Is it tough being a mortgage broker at the moment? I ask. Actually I have to ask twice as right then leggy Apprentice girl saunters past flicking her hair.

I know that in 2007 there were 33,000 independent brokers, there are now probably less than 10,000. In 2008 mortgage lending was £360bn, in 2010 more like £120bn so the answer is not a surprise. ‘Yes’, they say wryly, ‘but it is getting much better, it’s been extremely tough for many and we do smile looking back at how we choose the blackest day in decades to start a mortgage business’.

One large glass of white wine and a rather nice chicken and chips later I ask the killer question.

When you were a kid, did you dream of becoming a mortgage broker?
Much snorting ensues.

Matt apparently wanted to be an Engineer and qualified as one but was lured into finance through a management route. Monty considers a moment and after telling me he genuinely adores his job, gave me the answer I wanted. ‘Nah! I wanted to be a Rock Star… and still do’.

Tracy Kellett

Buying agent Tracy Kellett of BDI Home Finders is a gamekeeper turned poacher. Before setting up her property search consultancy, Tracy worked as an estate agent. Her mission is make professional home finding services accessible to everyone. In her personal life, Tracy has moved house 26 times.

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