Mortgages plc sales and marketing director Peter Beaumont says he is spinning plates and trying to make sure that they all stay in the air.
The sub-prime lender has undergone vast changes since it was acquired by European finance company Nikko Principal Investments in a £40m deal in January 2002 when the directors sat down and set goals for where the company would be in the next two to five years.
Beaumont says Mortgages plc has literally been rebuilt since the acquisition. “We looked at regulation and thought it was too early to make any definite decisions as we did not have the final rules. But we always knew there were opportunities to be had and we wanted to be sure that our distribution strategy matched the opportunities.”
Mortgages plc has certainly been on the move this year. Its first action was the purchase of a minority shareholding in new lender Infinity Mortgages in January. Infinity offers products for consumers with adverse-credit histories along with buy-to-let and right-to-buy products and Beaumont describes it as the perfect place for Mortgages plc to test products in the broker market.
As a lender with a real packager bias, receiving around 75 per cent of its business from packagers, the broker market remains largely untapped by Mortgages plc.
But Beaumont says that although the firm is still loyal to the packager market, it is essential, with regulation approaching, to look at all channels and have a foot in every camp. “We will support packagers and are proud to be associated with them but they are facing challenges and we cannot continue to rely just on them.”
This multi-channel approach is driving Mortgages plc forward. After taking the minority stake in Infinity, the company then bought Genesis outright in February. As both a packager and a mortgage and general insurance club, Genesis adds another string to Mortgages plc's bow.
Beaumont is sceptical about the survival of all the mortgage networks that have declared they will be taking principal status but he is happy with Genesis, describing it as a very well established business.
He says: “I heard a recent quote of 46 mortgage networks in the market. I would say this is a little on the high side, in terms of the brokers who are actually out there looking to become appointed representatives. I would caution brokers to look closely at the business they are thinking of joining and make sure they pin their flag to the most substantial with good infrastructure and compliance.”
Mortgages plc has also signed a joint venture with Mortgageforce. The venture has a working name of Spring and will sell non-conforming mortgage and loan products direct to the public through the Mortgageforce franchises.
Beaumont says: “I have known Rob Clifford, the Mortgageforce managing director, for years and we have been dancing around the idea of doing something like this for some time now. He wanted a direct-to-consumer non-conforming broker offering and we wanted a foothold in the broker market.”
He is unwilling to reveal details of the structure of the new offering but promises that it will be “something a little bit different”.
And finally there is the Mutual Collective, which entails three building societies buying new asset classes from Mortgages plc on pre-agreed terms. Beaumont says: “They give us a virtual balance sheet, because the loans are guaranteed to be acquired. We just originate the assets and transfer them over, so we benefit from their balance sheets.”
As part of the Mortgages plc “house of brands”, the three building societies will also be on the lender panel for Genesis. Beaumont describes it as “you scratch our back and we'll scratch yours”.
He says: “We want to be the hub of the wheel – there are a number of different companies doing various things all related to mortgages, which can bring in diverse income streams to our business. Our core business is lending but we will also be a financial services hub with a variety of profit streams.”
Beaumont says it has all come together for Mortgages plc over the last three to four months with all the brands starting to fit together and he reveals that there is more to come. “We are talking to three or four different companies.” He feels that Mortgages plc as most of the bases covered in the intermediary market, and is now looking more at the retail side.
Mortgages plc is adamant that its core lending business is still its main focus and Beaumont reveals he has an ambition to move into the prime lending market in the latter half of this year.
The firm does some near-prime lending through the Mutual Collective but says once it has integrated its businesses it will make a move into prime. “There are a number of banks interested in entering this market and we are happy to talk to them. Our ambition is to cover the whole market, excluding lifetime mortgages.”