VALUE ASSESSMENT

NAME OF PRODUCT / SERVICE: 
Specialist Mortgage Packaging.

ASSESSMENT REASON: 
Review

REVIEWER NAME: 
John Stanfield – Quality Control Manager

SERVICE DESCRIPTION

• A non-regulated activity assisting brokers in finding regulated and non-regulated products for their clients.
• Research using a sourcing system and / or exploring bespoke options with our lending panel producing lender AIP / illustration / ESIS anddocument requirements.
• Assessing application documentation and obtaining supporting items (such as valuations, consents, credit searches) prior to lender submission.
• Providing and responding to lender updates pre-offer, providing, and responding to lender updates post-offer.
• Providing and responding to lender updates pre-completion, liaising with lenders and solicitor’s pre-completion.

TARGET MARKET

Networks, Brokers, and Introducers looking to obtain specialist solutions for their clients who are seeking; residential mortgages, BTLmortgages, bridging or development finance, commercial mortgages, who have typically been refused by mainstream lenders, or havelimited options within the mainstream market.

LIMITATIONS

This service is not available for clients who approach us directly (Direct Clients). Clients who tend to meet mainstream lenders’ requirements and have no adverse credit history. We have no access to the usual direct client (‘clean’) customer rates via our packaged business arm. Individuals whose circumstances may still prevent a solution, even in the specialist market. Clients that fall below the expected minimum equity amount, e.g., with an LTV of 90% or higher may be excluded from most lenders. Clients who do not meet the lending criteria of any of our panel of lenders. Clients who are unable to demonstrate they have the means to comfortably repay any proposed loan. Clients who have been convicted or suspected of fraud or fail AML verification checks. Clients who are foreign nationals domiciled outside of the UK and are not a Director of a UK Ltd Company. Incomplete Data, Information, or confirmatory evidence, as requested by us from the Introducer. Which, in turn, causes inability to meet lender criteria, requirements, or regulatory obligations.

REMUNERATION

• Application Fee – non-refundable.
• Procuration fee – commission received from lender.
• Our assessment of our service charges within the distribution chain are deemed to offer fair value for the service and benefits we can provide.

MARKET RESEARCH WHEN DESIGNING SERVICE

Our service is not deemed significantly different (higher or lower) in price than other comparative services offered in our market. However, we are highly experienced in the provision of this service and are able on some occasions to attract exclusive and semi-exclusive products, and access to lenders and products/ These can be unavailable if attempted to access them directly. We can offerdedicated or in-house lender underwriters in some instances, which can speed up Service Level Agreements. Our service also provides initial product sourcing, document checking/review, lender case submission, lender updates, and post offer liaison with lender and solicitors.

We have looked at our competitors and lenders across the relevant lending disciplines that are captured by the Duty and aresatisfied our service is fit for purpose.

VALUE/BENEFITS

• Access to dedicated specialist consultants and an experienced case management Team.
• Available sourcing systems and specialist lenders to allow comparison of a number of possible options for introducing brokers and Networks (including Mortgage Clubs).
• Comprehensive knowledge and experience of the specialist mortgage market.
• High quality customer service - Trustpilot review rated excellent.
• Access to in-house CRM system, showing case milestones, tasks, and updates.
• Ensuring quality applications are submitted to lenders, and therefore help to avoid issues with poorly presented or packaged applications.
• Access to third party professional support, e.g., surveyors, solicitors, conveyancers, independent legal advisers.
• Ability to assess and apply lender target market considerations to the scenario and circumstances presented by the introducer.
• Experts in lender criteria and bad credit implications on initial review of broker ‘enquiry’ and throughout the application process.
• Close relationships with lenders underwriters so that applications can be considered on a bespoke basis.
• Access to Business Development Managers.       

BEHAVIOURAL BIASES PRESENT

None perceived – we act in accordance with an advising Brokers instruction, for their client’s respective requirements in this area. If anomalies are identified over the suitability of these provisions, we will feed back to the broker to discuss with their client accordingly. The introducer maintains the full relationship with their client – plus responsibility for any resulting ‘advice’.

CHARACTERISTICS OF VULNERABILITY

We will adapt our service according to the needs of our introducers and, in-turn, their customers.

Situations where vulnerability ‘characteristics’ may compromise the value of the service we offer, for example:

language barriers, first time buyers with less financial experience and resilience when compared to other mortgage borrowers; low level of financial sophistication or mental capacity issues.

We will give additional guidance and support to ensure they have the opportunity to understand the information being presented to the end clients and the implications of the arrangement being entered into to reduce the risk of harm occurring. We will also offer additionalcommunication channels to meet the needs of the individual and signpost additional assistance from external sources if deemed to be necessary.

The advising broker / Introducer retains the responsibility to communicate with, and handle their clients, in accordance with the relevant Regulation (Consumer Duty) and vulnerability considerations.

In the specialist sector, clients may also display examples of the following behaviours:

• Lack of knowledge and experience (low level of financial sophistication).
• Clients may have defaulted in the past and/or still have evidence of credit issues.
• As the customers will have historic adverse credit, they may potentially have low financial resilience, even though they may have improved their position since the historic adverse.
• The historical adverse could also indicate lower capability.
• There is a risk the introducing adviser automatically matches the client to a sub-prime/specialist lender rather than still searchingwhether a mainstream lender would accept the case.

The ways the firm mitigates against this risk:

• Ensuring Introducers are on the FCA register and hold relevant ‘certification’ and permissions to provide advice to their client - for the product type provided as a potential option.
• Application of cheapest suitable mortgage rule (via available sourcing).
• Consider underwriting criteria of lenders.
• Suggestions and guidance will be given to the introducer if we believe alternative mainstream options should also be considered (for their client/s).
• We would seek permission to share vulnerability issues with proposed lenders if deemed appropriate.

CONCLUSION: 
We deem that Our Packager service does provide fair value.

ACTIONS REQUIRED: 
None

NEXT REVIEW DATE: 
04/08/2025 or earlier if external factors dictate