A platform for those in need of a helping hand
Platform Home Loans began trading in 1989 as the centralised mortgage lender Bear Stearns Home Loans. The company became Platform Home Loans when it was sold in 1992 to Lehman Brothers, and run as a third-party servicing business. Platform re-entered the lending world following its 1997 acquisition by The Money Store, then the largest American non- conforming lender. Following its withdrawal from international markets, the business was then acquired by Cabot Square Capital in 1999 who reintroduced the Platform brand once more. The company was purchased by the Britannia Building Society in February 2001 as a route into the non-conforming mortgage sector. Its head office (pictured above) is situated in the heart of London's Docklands and is home to 110 staff.
Q: Has the business changed since its acquisition by the Britannia?
A: Only to a small degree as the Platform senior management team have retained day-to-day control of the business. A major advantage we have now is access to the society's treasury department. This allowed us to raise funds at a lower cost than before, plus it gives us easier access to fixed and capped rates for new products. The backing of a high-street brand has also helped greatly.
Q: How is Platform structured?
A: It is a wholly owned subsidiary of the Britannia Building Society. David Tweedy is the managing director with the other directors being Guy Batchelor - sales and marketing, Alexia Antoniou - underwriting and new business, Jane Arckless - finance, and Graham Elford - human resources. Peter Beaumont is head of sales and Paul Hunt recently joined the company as marketing manager. The company currently employs 110 people.
Q: What are the pros and cons of your product range?
A: Platform has consistently had the widest range of products in the market. We have competitive interest rates linked to an independently set rate index - LIBOR (London Inter Bank Offer Rate), fair early redemption fees allowing credit repair and some of the lowest fixed rates in the market.
There are not really any cons but we have certain principals. We are not a pure equity lender and will not entertain sub-prime refinancing from applicants who have current arrears and/or are under threat of repossession. We always look at an applicant's intent and ability to repay.
Q: How often do you develop new products?
A: We are reviewing our product mix all the time. New lending-driven products have evolved as gaps or new opportunities arise. For example, in the last two years we have launched a fast-track range, 95% LTV lending and a light adverse product which is designed to "fit into the gap" between PHL and our sister company Verso. This year, half of our lending has been on fixed rates and we find we have to revisit our tranche exposure constantly.
Q: What type of borrowers are Platform's products especially suitable for?
A: Platform specialises in lending to those borrowers who have been refused a loan by a traditional lender due to a poor credit record or other personal circumstances. We tend to specialise in house purchase rather than remortgages.
Our applicants can borrow up to 95% LTV plus fees depending on their credit history. We also provide very competitive fixed and discount products that give borrowers either a rate guarantee or an incentive rate in the early years, when they need it most.
Q: How does Platform intend to remain competitive?
A: By providing competitively priced, value-for-money products combined with high levels of service. We have traded in this market for over four years and have one of the highest conversion rates of applications to completions coupled with one of the lowest arrears records. Introducers use us because we perform and we think this positive and prudent attitude to lending in our sector will hold us in good stead for the future.
Q: How does Platform manage its relationships in the intermediary market?
A: The majority of our new business is sourced through packagers, with the balance through corporate accounts such as Legal & General, Scottish Amicable and Scottish Life Mortgages. We support intermediaries through our 11-strong external sales force, an intermediary call centre who answer queries and take DIPs (decisions in principle) and a new business department with mandated and dedicated case managers processing new cases from application through to completion. Of the eight mandated underwriters, four are mobile. They are based from home and spend their time driving between packagers' offices to underwrite. We see a lot of other lenders' rejects - 60% of all application forms received are on other branded forms.
Q: What is Platform's share of the intermediary market?
A: This is difficult to say as we do not have loan volume figures for all our competitors - the non-conforming market sector tends to remain a little more secretive on these matters, but we are happy with our overall volume.
We are totally dedicated to the intermediary mortgage market, as we only source new business via this channel. When the Money Store launched in 1997, we also had a division dealing directly with the consumer. This was closed down prior to the purchase by Cabot Square as we found that the costs of originating direct business were too great.
Q: What are the procuration fees on Platform's product range?
A: On our core business we pay a procuration fee of 1% on the entire product range, subject to a minimum of £500. On our right-to-buy and regulated mortgages (less then £25,001), the minimum is £250. Packagers are paid a fee on top of this for the additional services they provide including, but not limited to, packaging, marketing and sales.
Q: How long does it take for a decision to be made on a case?
A: Our telesales department can normally give an answer to a DIP within one hour of receipt, whether phoned, faxed or emailed. Once a properly packaged case is received we normally issue an offer within 24 hours.
Q: What was Platform's reaction to CP98?
A: It is felt that statutory regulation for the mortgage market is long overdue and we welcome the FSA's involvement. However, the proposals under CP98 are not expansive enough. Mortgage introducers should be directly regulated. Advice as well as information given should fall within the FSA's remit. Also, the pre-application illustration process as currently envisaged will be very difficult to police, especially in the non-conforming intermediary sector of the market.
Q: Is there a need for an industry body to represent mortgage intermediaries?
A: Most definitely, especially in these changing times. There needs to be a representative or trade body for mortgage intermediaries as it is important that their views, concerns and thoughts can be heard.
Q: Does the Mortgage Code have a future?
A: We think it does. Under CP98 mortgage lenders will regulate the provision of accurate information to the consumer at the point-of-sale, whether direct or via an intermediary, but not any advice given.
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