The phrase ‘secured loan’ is becoming extinct among some firms in the industry, being replaced instead by ‘second charge’ – the phrase favoured by the new regulator the Financial Conduct Authority.
One brokerage feels so strongly about the issue that is has changed its name to reflect the new regulatory world.
Loan introducer speaks to Mark Fry, managing director of Colonial Second Charge Loans, about his recent rebranding.
Q: You recently re-launched, changing your name from ‘Colonial Secured Loans’ to ‘Colonial Second Charge Loans’ – why was this?
A: Colonial Secured Loans worked very successfully under the Office for Fair Trading regime. Colonial Second Charge Loans (CSC Loans) however was formed to deal with the change of emphasis to ‘second’ rather than ‘secured’.
Q: Did you debate over any other names?
A: a number of names were considered but we ultimately felt that it was important to retain ‘Colonial’ in any name ensuring that it was recognised instantly by of our introducers and lenders.
Q: Do you expect more firms that also have ‘secured loan’ in their name to follow suit?
A: I don’t recall any other companies having secured loans as part of their trading style so it might be that others continue as they are. Our trading style of Colonial Second Charge Loans makes it very clear in the market in which we operate in, as reflected by the regulators description in various consultation papers.
Q: Has anything else changed about the business other than your name?
A: CSC Loans has a fresh new contemporary feel. Everything has been revamped, from the website to Post-it notes. Every change has been made with the customer journey in mind so documents have been printed in plain English and policies have been put in place to avoid any customer detriment. One thing that hasn’t changed is the competent and committed team.
Q: How do you expect the second charge mortgage market to change over the next twelve months?
A: I would like to think that now that our industry is regulated by the FCA, all introducers operating in the first mortgage market will give the second charge market the credibility it deserves. Introducers should consider the second charge option as a matter of course. While every case needs to be looked at on its own merits, there are genuinely numerous scenarios where a second charge option is clearly the most appropriate advice..
Q: What do you think still need to be done in terms of educating brokers about second charge mortgages?
A: We have been trying to educate brokers/introducers for many years. Most recently through our ‘Reason Why’ email campaign where we highlighted six of the most popular reasons why firms should consider a second charge. Now that we are regulated by the FCA, I think more FCA mortgage regulated introducers will automatically consider the second charge option. We intend to hold webinars, which will be open to anyone operating in the mortgage sector and will highlight situations where a second charge should be considered.
Q: Are you worried about the slight dip in second charge mortgage business that was reported in April?
A: No one likes to see a drop in their industry figures. We seemed to buck the trend in April with our biggest month of the year, helped by an average loan size of £86,000. I am not overly concerned about the reported dip and feel that going forward there will be greater awareness within the whole mortgage market of the importance and strengths of the second charge.
Q: What would be your ideal second charge loan product at the moment?
A: While the current lenders in the market cater for most client scenarios it would be good to see more lenders offering 80% or 85% on buy-to-let products. I would also welcome lower rates in the residential 80% – 95% LTV sector.
Q: If you could have dinner with anyone, people past or present, who would they be with and why?
A: The new Brighton & Hove Albion manager Sami Hyypia – as a season ticket holder I am be interested to hear how he plans to get us promoted next season.
Bryan Ferry – I’m a big fan and have seen him in concert a few times but never had the privilege to have dinner or even a drink with the man.
Q: What advice would you give you’re younger self?
A: To wear sunscreen like the Baz Luhrmann song advised us all to do in the 90s.