Mark Chilton has gained a reputation as one of the best start-up men in the mortgage business for his role in launching and growing Savills Private Finance and before that First Mortgage Securities. He believes his latest venture, Purely Mortgages, will drastically change the marketplace.
Backed by Chase de Vere Mortgage Management and funded partly by GMAC-RFC, Purely Mortgages is a massmarket fee-free mortgage intermediary firm which aims to be a dominant player in the market.
It is an ambitious goal but Chilton's track record shows he may be the man to do it. So far, he has introduced the UK to derivative-based mortgages, pioneered the first two-year product and developed the UK's first phone-based mortgage service.
From his new offices in Covent Garden, London, Chilton is his usual confident self over the prospects for Purely Mortgages. He has set up a national call centre on the south coast and put together his initial team of advisers, all of whom are from within financial services but outside the mortgage market, in a deliberate move to start fresh with none of the “inherent hard-sell baggage” he says comes with mortgages.
Chilton is damning about much of what goes on in the mortgage industry today, saying there is still a lot of dishonest practice out there. “Some people have actually fooled themselves into believing they are not actually being dishonest.”
He picks out some sectors of the sub-prime market for particular criticism. “Here you are dealing with people who are the most disadvantaged and selling practices in this sector are extremely predatory. Brokers eat what they kill – almost literally.”
He says an assortment of hybrid brokers and packagers are making big profits out of people's misfortunes and “getting tremendous commission from lenders so there is no need to charge 5 per cent brokerage fees at the same time. This is sheer greed.”
Against this background, Chilton's determination to keep Purely fee-free takes on a brighter light. Although completely up-front about wanting to dominate the market and make Purely a very profitable proposition for its investors, he also talks about the need for a more socially aware mortgage solution in the sub-prime marketplace. “There is plenty of money to be made – I am not above that – but at the same time there needs to be a much fairer mortgage choice for those less advantaged.”
Intent on keeping the hard sell out of Purely, Chilton has developed a system of remuneration and goals for his advisers that is not based on the monetary value of loans but rather the number of loans: “I want every one of our customers to have the same high quality of service. The fact is that most brokers will switch phones pretty quickly if they are on the phone to someone wanting a £50,000 mortgage and someone else calls through wanting a £500,000 mortgage.”
But what Chilton seems to relish most is the challenge of starting a business from scratch. “This is my third time around and I think I have become pretty good at it.”
Even his colleagues at Savills admitted that, when he left in 2001, Chilton was lacking the challenges he craved. Although he has had offers to go into other companies and restructure them, he is reluctant to take on such a challenge. “I am not the type of person who likes going into companies to slash and burn. I would rather set something up from scratch so that there are no legacies and we can develop the culture and systems that we want to succeed.”
Challenges take a high profile in his personal life as well. He is a keen sportsman, albeit with a penchant for “slightly nutty” diversions. He co-owns a 1948 Olympic keel boat, the Swallow, which he races from Chichester harbour, where he has a second home. In the winter he races kite carts along the beach and says he would dearly love to start racing classic cars as well. He has acquired a very small collection of older cars. “None of them is especially valuable, they are just cars I particularly like.”
Chilton puts a high level of importance on education which he believes – along with family – is central to getting ahead in life. He is a governor of a co-educational boarding school which his children attend.
A product of the public school system himself, he laments the condition of state schools in London and is quite pragmatic about his decision to send his children to boarding school. “Facilities are much more comfortable these days and it is an education that will provide people with what they need to succeed. If I were to send my children to school in London where we live, they would have to spend countless hours travelling on buses. Where they are now, it is a pleasant stroll to classes with plenty of spare time to enjoy the facilities and socialise.”
Chilton's family seem to be the greatest driver in his life and his hero is his father, who he says started out with nothing as a runner at a Lloyd's syndicate and achieved great success in later life, eventually becoming the deputy chairman of a quoted insurance company. “I am proud of the person I have become and owe it to my father, not only my inspiration but the person who gave me the confidence to get where I am today.”