Second charge brokers fail to learn the lessons of the mortgage market

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TAR045
Issue Date: 17th May 2007

17th May 2007 – Second charge brokers are jumping on to the secured loan bandwagon without making the necessary investment in technology, according to Chadd Mutyambizi, Lead Consultant at Target Group, who was speaking at Mortgage Business Expo, Manchester. As a result, they are operating like mortgage brokers of 10 years ago and will not remain competitive.

The significant growth of the second charge market, and the move by many brokers into this arena, has highlighted the role technology plays in effective processing and enhanced customer satisfaction, and in particular in the areas of speed of decisions, sourcing and document production. Many parallels can be drawn with the way the mortgage market has changed over recent years: it has embraced technology, transformed the way it works and as a consequence made great efficiency savings and boosted revenue.

The mortgage market was forced to change as it was faced not only with products becoming commoditised and falling margins but also with increasingly savvy customers prepared to take their business elsewhere in search of a more competitive and responsive deal. As a result, brokers embraced technology to improve efficiency, customer service and competitive edge.

Against this background, brokers have had to look for new revenue streams, and this has prompted moves into secured loans. Once again these have brought up issues of processing and sourcing, but brokers have jumped on to the bandwagon without investing in the necessary technology: in short, they have failed to learn the lessons of the first charge market.

Chadd Mutyambizi stated: “Brokers in the second charge market are operating like mortgage brokers 10 years ago, and are not taking advantage of the technology now available for this sector. They must implement the correct technology to remain competitive and offer good service. With the advent of secured loan sourcing systems, as well as processing software which can support multiple lending, there has never been a better time for brokers to buy into the software generation and avoid becoming paper heavy.”

For further information contact:
Gemma Polding, Marketing Executive - Tel: 029 20301593
Target, Target House, Cowbridge Road East, Cardiff, CF11 9AU
Tel: +44 (0)2920 301 401
email: gemma.polding@targetgroup.net
Website: http://www.targetgroup.net