View more on these topics

Home of Choice to enter administration

Home of Choice has filed for administration with the High Court after takeover talks collapsed.

In a statement today, the mortgage network reveals that it will have to appoint administrators after it could not secure an extension of overdraft facilities and an acquisition deal fell through at the last moment.

The statement says: “It is with enormous regret that the board of Home of Choice announces that it has filed with the High Court a notice of its intention to appoint administrators.

“Over the past few months we have been working towards selling the company. We believed that having a fresh injection of capital would allow HOC to enhance broker services and grow the business. We were delighted that several offers were made to purchase the company during this process and a preferred bidder was identified.

“We were convinced by assurances from an investor and our bank, that broker and staff payments, although delayed, could be made on Monday April 26. Although the FSA granted a change of control to the investor on Thursday April 22, talks collapsed at the last moment.

“This week we have continued talks for the sale of the company with other investors.

“However, we have not been able to secure an extension of our overdraft facility to cover the payment due to brokers and staff.  

“Despite working our way through 2009 and placing the business in a position to be bought by a number of financial services groups, it has been impossible to complete the arrangements.”

The network says an administrator will be announced later today and it says it will work with them to ensure the best possible outcome for brokers and staff.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 17 comments at the moment, we would love to hear your opinion too.

  1. More for the FSCS?

  2. Another one bites the dust! Poor brokers going to get stiffed once again. When will anyone protect us?

  3. Disgusting and greedy directors and board. We nearly joined them four weeks ago and were totally misled by one of the regional directors – good job we didn’t.

    Membership of a network must be questionable – maybe directly authorised is best!

  4. Every time a network tells it’s brokers that missed payments are down to a systems failure we know it’s titsup time. Why are they allowed to publish misleading or mendacious statements.

    Good result for MM – Mortgage Network of the Year 2009?

  5. Yes another one bites the dust, when is the economy ever going to recover? All I ever see our more companies failing by the week due to lack of lending.
    Lending is so tight it’s just ridiculous to get any funds to prop companies up in these very difficult times.

    Lewis Greene

  6. What baffles me is that in November 2009 announced last published accounts for the network for the year ended March 31, 2009 showed a £6.8 million profit, just wonder if directors pocketed huge dividends instead of reducing debts.

    If the FSCS has to pay compensation they should be looking at the accounts and asking questions. Directors should be held accountable for the loss of income owed to advisers.

  7. It’s obvious that the FSA ‘network’ model doesn’t work. Rather than giving us a compliance mechanism that works, the FSA has given us a costly regime that stifles growth and innovation. Highly regulates brokers and virtually turns a blind eye to the banks. Their treatment of brokers in this position will be awful, and they will find changing to another network difficult and costly, with income lost.

  8. Re – Anonymous | 29 Apr 2010 1:10 pm

    Surely not the MUCH TRUSTED directors pocketing huge dividends?

  9. Yet again the brokers are the ones who will suffer. I do not know what the mechanics are of what happens with the money within a network but why are the commissions from lenders and life companies not ring-fenced, like client money? Only their percentage split belongs to them and if their business model is sound then they should be able to cover their costs, overheads and any borrowings from those monies. This money does not belong to them. the brokers are not employed by them. The FSA needs to address this as this will put more brokers out of business, yet again through no fault of their own. Very interesting to see the HOC declared profits of 6.8 million. It will also be interesting to see how much the Directors have taken in the last 12 months and I assume all staff have been paid up to date – with brokers money.

  10. Paula Richardson 29th April 2010 at 3:10 pm

    Chris you assume incorrectly. It’s not just the “poor” brokers that haven’t been paid it is also all the staff.

  11. When this happened to NDL I suggested that brokers earnings should be ‘ring fenced (in a Cherry forum)’ for the future and challenged the FSA to do so, but when it ‘won’t happen to me’ mentality is used (I remember smug people saying their network was much better) it doesn’t happen. We must now ensure that earnings are indeed ‘ring fenced’ or be prepared for this to happen again and again and next time….. IT COULD BE YOU!!!!.

  12. In response to Chris Birchall I can assure him that as an employee of HOC I have not been paid ! and with no likelihood of either wage or any expenses incurred.

  13. It is so easy for those not involved to pass judgement. In this current economic climate, it’s a case of “there but for the grace of god – go I!”

    I wish all who worked for HOC all the best for the future and hope that they each find a profitable solution going forward.

  14. Chris Hulme - HoC AR (sooner to be former) 29th April 2010 at 5:33 pm

    Thanks Gerry, thanks a lot. The lies in the emails last Friday and earlier this week that blamed the BACS system when all along you’d already spent our money.
    At my last calculation, about £70,000 of my money, around £20,000 due NOW and around £50,000 in the pipeline which the providers inform me they will only pay to HoC.
    TCF? What about Treating Advisers Fairly? or is that just absent from vocabulary.
    The FSA inform me that it could take over 3 months to re-authorise directly!
    Where now? My MP?

  15. After being an AR for HOC and Being uncomfortable at seeing the way this company was run, I can only say I am surprised that it has taken so long for this unhappy event to materialise, and happy that we chose to leave in 2008.

  16. I appreciate how difficult it is for HOC staff who were not paid their last month’s salary, and it must be a devastating shock to find out they no longer have a job. But I feel the blow to the AR’s is even worse – they are owed two weeks worth of commission and have thousands more in the pipeline that will go directly to HOC even though they are now in administration. As a business we have worked out that we are going to lose £50,000 alone in commission due to us, and the worst thing is that even on mortgages not completed yet, the lenders will continue to pay HOC and won’t pay directly to us, punishing us brokers even more, when it hasn’t been our fault. We have to continue to work on the mortgages already submitted to keep our clients’ faith, knowing full well we are not going to receive a penny of the procuration fees owed to us. Effectively the directors of HOC who allowed this to happen have completely crippled all but the biggest AR’s. And where are they now? Absolutely no communication from them whatsoever, apart from a few extremely short and vague messages from Gerry O’Brien that infuriated us even more. I admire Kieran Byrne’s positive attitude (see Mortgage Strategy comments page) but it is hardly what the smaller AR’s will be thinking, whose careers now almost certainly lie in tatters because they cannot afford to lose months and months worth of commission owed to them. Bankruptcy may be the only option, and this then of course means they cannot work in financial services again. The directors who knew about this must have known things were in difficulty for a long time but continued to lie to us, not giving us any warning or enabling us to come up with contingency plans. Lending has been ridiculously tight recently, making it obvious to us that lenders don’t actually really want to lend, and now this seems to be the final nail in the coffin for many. Where are the FSA and what are they doing? Wasting time interrogating honest hard-working brokers instead of keeping an eye on the banks. Utterly useless.

  17. The FSA have just told me that they cannot do anything to help us HOC AR’s. After all the evidence we have to submit to them for compliance, they are now leaving us high and dry. What exactly is the FSA’s purpose?

Leave a comment