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Branded loan firm gets B&W backing

A new branded lending company, Abacus Permanent, is being set up this month by the directors of Moneysuper market.com and Mortgage 2000, with Bristol & West and Preferred Mortgages backing the scheme.

The move comes despite industry experts warning of the dangers associated with branded or correspondent lending due to the lack of transparency caused by blurring the line between manufacturer and retailer.

IFA Holden Meehan warns that correspondent lenders can hide behind a branded product, making it easier to sell off parts of their mortgage book, but says it does offer the benefit of being able to create tailored products for brokers.

Branded lending involves a lender using its money to give a mortgage to a borrower and then selling the loan on to another lender.

Abacus sees Bristol & West entering the branded market for the first time. It says it will offer intermediaries competitive products, procuration fees and service.

The new company&#39s product range will include full status, buy to let, right to buy and adverse-credit loans.

It says intermediaries will be able to track cases online, deal with an Abacus representative by phone and get fast, decisions through its team of underwriters.

Mortgage 2000 sales and marketing director Sean Hornsby says: “We believe we can offer a formula intermediaries find beneficial. It is a combination of competitive products, up-to-date technology, personal service and of course reward.”

Mortgageforce managing director Robert Clifford says: “My experience of correspondent lending is that 90 per cent of deals pay much higher procuration fees.”

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