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A&L sticks to its principals

Alliance & Leicester head of intermediary sales Mehrdad Yousefi is adamant the company has made the right decision in restricting the number of principals it would deal with up to and beyond M-Day.

“Lenders have to be very vigilant about the marketplace and it will not be until the end of January at the earliest when we know how many regulated mortgage professionals there are and what business models networks they have.

“We are ready to trade with those with a sustainable business model. It is our priority to validate our current 18,000 plus intermediaries first.”

The move disgruntled many IFA firms which have suggested they may not want to work with A&L and reinstate relationships, even if invited to do so in 2005.

Yousefi, originally from Tehran, came to the UK in 1976 and has been in the mortgage market for nearly 20 years, working alongside brokers since 1985. He has seen many changes in the UK property market. “The beauty of the mortgage market is the ever changing trends. It is very dynamic,” he says.

A&L’s relationship with intermediaries began with Hambro Life in 1975 but Yousefi says it has been most successful over the last eight years. The intermediary market function was set up in 1996, focusing on what intermediaries want from a lender and how they can help to service their clients.

A&L introduced online trading in June 2001. There is now a service centre dedicated to intermediaries in Belfast and it has taken on board the needs of prominent intermediaries, introducing exclusive products for Legal & General, Zurich, Premier Mortgages, Savills, Charcol and other major players.

A&L deals with about 18,000 mortgage intermediaries. It is in negotiations with 12 to 15 networks between now and Christmas to create new relationships but Yousefi says A&L believes in “controlled expansion” – referring to the decision to restrict the number of principals.

Another stance is to provide a clear picture of where it stands on the accuracy of key facts illustrations. The lender will not take responsibility for the accuracy of data once it has been passed to the sourcing system. A&L has in-house staff to verify all product data supplied to mortgage sourcing systems but what appears at the other end will depend on the quality of technology and staff who manually input information.

For now, A&L, like most lenders, will be focusing on ironing out some of the problems it has encountered with mortgage regulation.

Yousefi admits there have been issues it has had to deal with since November 1. For example, it was discovered on that Monday morning that A&L’s system would only offer KFIs with a property purchase price of £1m rather than a maximum loan value of £1m. The firm put this down to human error and rectified the matter that morning.

Despite being able to offer KFIs from the first day of regulation, it is still having problems with porting them for existing customers. The firm says this issue will be sorted out by the end of November but until then, intermediaries will have to obtain KFIs directly from branches or over the phone.

Despite the problems, Yousefi says the past two weeks have been better than could have been expected and adds: “Regulation certainly has not curtailed business.”

A&L was able to launch a range of mortgages on November 10, including improved five and two-year fixed-rate mortgages, a long-term base rate tracker for one year and a low start two-year discount fee saver. The five-year fixed-rate is priced at 4.99 per cent until January 31 2010. The two-year fixed-rate is priced at 4.79 per cent until January 31 2007.

Both of these, according to Yousefi, are favourites with intermediaries who are opting for fixed-rate mortgages in a climate of rate changes.

Yousefi is keen for A&L to be the first lender to emerge with a capability to make offers online subject to valuation. He says: “In the short term, this would be very challenging. Over the next two years this will be a key topic for research and development.”

He is confident the mortgage market will remain interesting and profitable and says intermediaries have enjoyed a buoyant year and will be happy if they write the same amount of business next year.

Yousefi says: “The mortgage landscape will change. The size of the salesforce will be smaller and so competition will be more intense.”


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