Twenty7Tec has fended off fierce criticism from rival sourcing providers for its decision to let its B2C subsidiary company Mortgage27 enter liquidation.
An employment tribunal awarded against Mortgage27 was a factor in Twenty7Tec writing off its subsidiary firm, which focused on the direct-to-consumer market.
Andrew Simon, executive general product manager at Trigold’s parent group IRESS, said financial stability is crucial in developing long-term relationships required for success.
And Mark Lofthouse, chief executive of Mortgage Brain, added that MBL would never write off a subsidiary and the company would always honour its commitments.
Lofthouse said: “Mortgage Brain would always honour its commitments.
“Mortgage Brain is a company that honours its commitments and obligations and has never liquidated a subsidiary company to eliminate liability.”
Andrew Simon said: “Innovation in technology is vital to support a mortgage market that continues to evolve in response to consumer demand and regulatory change.
“What is equally vital is that this innovation is backed by continued investment.
“Our experience over the last 15 years in the industry has taught us that financial stability is crucial to developing the productive, long-term relationships required for success.”
Rick Watkin, the chief executive of eKeeper Group, which provides a broker CRM system, added: “This shows that when choosing an IT provider it’s important to check their accounts and make sure they have a strong track record.”
James Tucker, Twenty7Tec Group’s managing director, defended Twenty7Tec Group’s conduct after attending a creditors meeting in Bournemouth yesterday.
He said: “It’s a perfectly legal thing to do and there’s plenty of precedence for this.
“We’ve had no issues with our clients and prospective clients.”
At least three high ranking members of Mortgage Advice Bureau â€“ including chief executive Peter Brodnicki â€“ have a collective 10% stake of 10% in Twenty7Tec.
Peter Brodnicki has 700 shares (7%), chief operating officer David Preece has 132 shares (1.3%) and ecommerce director Donna Brenchley has 100 shares (1%).
MAB uses Twenty7Tec’s mortgage sourcing system MortgageSource.
Brodnicki and Preece said they had no direct role in Twenty7Tec’s decision to shut down Mortgage27 and that it wouldn’t influence the close links between the two firms.
Brodnicki told Mortgage Introducer: “It’s not affected their relationship with us in the slightest â€“ it’s got nothing to do with the software that is being adopted.”
And Preece added: “From MAB’s perspective we’ve been using their software for some time and we’re delighted with it.
“Our view of their software hasn’t changed and we’re continuing to use to it.
“Ultimately it’s the decision of Mortgage27.
“We were aware of the tribunal claim but they informed us very recently â€“ in the last couple of days â€“ about the liquidation.”
Twenty7Tec said the decision to close Mortgage27 would not influence its other companies, MortgageSourceTec Ltd, MortgageApplyTec Ltd and LoanSource Ltd.
Tucker explained earlier this week: “We want to focus on back office systems rather than maintaining two different systems.
“At group level we determined some time ago that the B2C market was no longer profitable and we would not continue to invest to support Mortgage27 Ltd.
“Further to that, an employment tribunal award against Mortgage27 Ltd related to an ex-employee of Client Data Systems Group placed an additional financial burden upon the company that we were not prepared to support.
“We felt that Mortgage27 Ltd would trade insolvently if we allowed it to continue and as such we placed it into liquidation.”