T he hardest part about setting up a new business is name awareness, believes Freedom Finance managing director Colin Snowdon. In Freedom, he believes he has a proposition which is set to make waves in the sub-prime mortgage industry. Snowdon has been a mainstay of the mortgage industry for almost 20 years and has made a career of successfully launching mortgage businesses.
Since leaving university in Birmingham, he has worked in banking or financial services, starting as a graduate trainee at Lloyds Bank in 1976. By 1979, he was managing a Leicester Building Society branch in East Yorkshire.
He moved to National Home Loans in 1985 as business development manager and says this is where he started to gain a true understanding of providing mortgage products to advisers and brokers after becoming a product development manager.
In 1988, this new-found knowledge led Snowdon to NWS Bank, where he launched The Mortgage Business in 1989, which was followed in 1998 with the launch of Verso for Britannia Building Society. When Britannia merged Verso with its newly acquired Platform Home Loans, Snowdon sought new challenges at Freedom Finance, which had just set up a new Freedom mortgage subsidiary.
He says the long established secured loan company has been a useful vehicle for launching the specialist mortgage lender. This is the third time he has set about finding a dominant market position for a new lender and he believes the greatest challenge is spreading the word among brokers and convincing them that he has a valuable proposition.
Snowdon says that unlike the previous two organisations he worked for, he has been able to “get back to basics”, getting out in front of brokers to explain Freedom's offering.
“Even as MD, I am able to go out and see brokers to ask them what they think of the proposition. This is invaluable information because it brings you back to the real world and you can see what makes it tick.”
Snowdon says he has confidence in the specialist proposition that Freedom has developed. The firm is concentrating on sub-prime and low to medium adverse lending strictly through intermediaries. Rather than using traditional income multiples, Freedom is using “affordability” based on an applicant's regular incomings and outgoings. Snowdon says this provides a much more accurate picture of a person's lending capacity and ability to repay.
Additionally, rather than use Libor, Freedom has taken the decision to use bank base rate tracking for all its products. “This is a much better way for brokers and applicants. Many lenders out there are operating with different reference rates for different products and there is no reason to make life so complex for customers.”
To bulk up its distribution, Freedom recently bought a 56.5 per cent stake in mortage network Mortgage Next which will distribute its new range and has also signed a distribution deal with mortgage distributor and packager Pink Home Loans.
Snowdon also has a strong background in industry regulatory issues. He has sat on the CML board, was chairman of Imla and contributed to setting up the mortgage practitioner panel. He believes this experience will help the new company fit easily into the new regulatory environment but he is none too complimentary of the regulatory system soon to be introduced in the mortgage industry. “A fully regulated mortgage environment is like taking a mallet to a walnut. I am all for good regulation but if you look at the past and potential consumer detriment in the industry and the way the current regime works, full regulation does not seem warranted.”
Counting himself “not as an enthusiast but rather a pragmatist”, he is nonetheless upbeat about the approach of M-Day. “We are a new company so we do not have any legacy systems to deal with or an unregulated culture. From the very beginning, we have been set up for the new regulatory regime.”
Outside the office, Snowdon is keenly interested in politics and is reading the Alan Clark Diaries, which he sees as a unique window into what makes history. “Alan Clark was a moderately successful Conservative politician but he will be immortalised not because of his time in politics but because of his diaries, which give us great insight into the halls of Whitehall.”
He says although the two of them come from vastly different backgrounds – Clark a “toff” and he from a working-class family – Snowdon says he can relate somewhat to the former MP as a collector of classic cars.
He has been fascinated by history since he was young when he would spend all his pocket money on history books and says he has always been curious about the what-ifs of the world. “In retrospect, people always think many of the greatest events in history were inevitable but the smallest circumstances can dramatically change the course of events.”
Snowdon has maintained a deep interest in Russia and Russian history since he took A level Russian and studied Russian history at the University of Birmingham. This summer, he is planning his first trip to St Petersburg.
He counts Peter the Great among his heroes – “a leader who believed in starting from the bottom and working his way up” – although he says that does not mean he runs Freedom Finance as a 17th Century monarch or taxes his employees for having beards. He also names Lord Nelson as a hero as his victory at Trafalgar was the single most important event in establishing Britain as a world power.
As to what history will make of Freedom, Snowdon is confident it will find its place as a successful innovator in its marketplace. “We are confident we are moving in the right direction. As for what lies in the future, only time will tell.”
County Durham, 1954
Lives: Northwich, Cheshire
Educated: Bede Hall Grammar School; University of Birmingham BA in medieval and modern history Career: 1976-1979 graduate trainee, Lloyds Bank; 1979-85 branch manager Leicester Building Society; 1985-88 National Home Loans, business development manager, then product development manager; 1988-97 NWS Bank, setting up The Mortgage Business (launched 1989); 1997-2002 managing director, Verso (launched 1998); 2002- managing director Freedom Finance Career ambition: To make a success of Freedom
Life ambition: To be a success and balance this with a happy family life Likes: History, particularly military history, classic cars and classical music Dislikes: Cricket
Drives: S class
Mercedes, Triumph TR6