Mortgage Brain director Mike Green last week sold his business to a consortium of major lenders, including the Halifax and Nationwide, for an undisclosed sum. Not bad for a self-confessed snotty-nosed brat from a Tyneside council estate.
The acquisition could change the landscape of the mortgage market for good and is an endorsement of Green's “protestant work ethic” and dogged determination.
The significance of the acquisition can be more easily understood using Green's own analogy. He says: “The Halifax has effectively bought Railtrack. All Railtrack does is provide the tracks for trains to run on, it does not run any trains.
“The fact that Halifax has bought it and there is not some Bill Gates-style person taking control means lenders will be less nervous about the costs.”
Green considers the Halifax as a white knight in a mortgage market whose progress towards the streamlining promised by a common trading platform had long been plagued with deadlock, spiralling costs and, as Green puts it, the problem of entrusting the running of the industry's “Railtrack” to a private company.
“Some of the existing business models were like giving private companies a loaded gun and asking them not to use it. Lenders felt they would have had to prepare themselves for a lot of blackmailing on price to use the CTP.
“What the lenders who have acquired Mortgage Brain have done is break the deadlock. What they are saying is pretty staggering because they are basically willing to syndicate this out to their business rivals.”
Mortgage Brain is Green's baby and enjoys the feel of a well-run family business. His wife Anne has been finance director for seven years. Customers of the company include Zifa, Friends Provident and Royal & Sun Alliance.
Mortgage Brain has been providing technology to financial advisers and lenders for over 10 years. So why has it taken so long for anyone to have the bright idea of buying it? “The problem with the market is that it was so fragmented,” he suggests.
So, when Green was summoned to a breakfast meeting with the Halifax's head of intermediary lending earlier this year, he was all prepared to do his best job to sell his product but no more.
“There I was, all bright-eyed and bushy-tailed, ready to sell to Halifax, when I was told Halifax did not want to buy my product (they did not want to turn me into Bill Gates) but would I be interested in selling the company to them?” What was Green's immediate reaction? “I nearly bit off his arm at the shoulder.”
Green continues: “All of this, all of the business, matters naught unless I could sell it. I am 55 now and I want to see this done right. I want to see it up and running and say: 'There you go sunshine.' It is possible what we are doing now will change the face of the market for ever.”
G reen was born in 1946 in Kent but moved at just three weeks to Gosforth in Newcastle. There, his father worked as a civil servant at the now defunct Ministry for Pensions.
At the age of 12, little Mike (Green claims he did not start growing properly until he was 16) was taken to Surrey, where his father had been transferred to run a branch of the DSS. Green was shoehorned into a swift transformation from Gosforth brat to Surrey grammar school boy. Luckily, he had already devised a strategy for survival.
“You learn to lose your accent pretty damn quick. Also, on the first day, I smacked the biggest, ugliest bastard in the playground to establish myself in the pecking order. He, of course, kicked the living daylights out of me but I had gained a bit a credibility.”
Then came the wild years of wearing leather and working to identify himself as a rebel rocker. But, at 17, reality hit home. “School finished and there did not seem to be any options. I was not very good academically but I was good with my hands.”
Uninterested in “dirty, oily engineering”, he turned to electronic engineering and joined Cable & Wireless on a traineeship in 1963.
In 1969, looking to crack the magic £20-a-week barrier, he responded to an ad for a mainframe engineer with Honeywell computers, where he continued his training and upped his salary.
Green went through a number of career changes before entering retail in the 1980s with a software agency for the motor and household insurance markets. Then he jumped on the booming PC bandwagon and opened a shop in Croydon.
Green's CV states: “This is where Mortgage Brain started. It was formed in the pub opposite the shop and began operations from the stockroom of the shop. There is a two-year overlap during which time my wife and I were running both the shop and Mortgage Brain.”
What happens now? “There is an element of pride in this, of doing it right, handing it on and saying 'I did that' and I am not going until I have finished. I am the big boy in the playground now and I have come back with my big brothers backing me.”