First European Securities makes secured loan comeback

First European Securities has re-entered the secured loan market four years after it withdrew.

The lender is distributing its products through a panel of ten introducers, including Broker-Support.

Its range includes unlimited adverse loans from £3,000 to £25,000, available up to 65% LTV, including fees and PPP, plus self-cert loans up to £40,000.

Nick Barron, director at First European Securities, would not comment on the other nine distributors, but says it may look to extend its panel.

He says: “We came back into the market a few weeks ago. We are having a look to see how the market reacts to our products and we will see if we will distribute them via a wider network. It has been received well so far, we think there is a big gap in the unlimited adverse sector at the moment and that is what’s slowing the secured market down.”

Steve Dicks managing director at Broker-Support, says: “We are delighted to welcome 1ST Euro to our preferred panel of lenders, as we believe them to significantly complement our market leading support service to personal loan packagers.

“Broker-Support.com is again distinguished from its competitors by adding real value to lenders and this most recent example can only benefit our members who will undoubtedly make good use of the innovative products now available.

“We would like to thank 1st Euro for extending the opportunity to all our members & allow us to put still more distance between us & the lending volumes of the commission clubs.1st Euro are the first of a number of new facilities and preferred partners that will be launched in the near future.”

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AFB deputy chair calls for FSA to regulate secured loans

Tony Machin, chief executive officer at Freedom Finance, and the new deputy chairman at the Association of Finance Brokers, says the Financial Services Authority desperately needs to regulate the secured loan market.

In an interview with Loandistributor.co.uk, Machin says that FSA regulation would help the secured loan market’s reputation with first-charge mortgage brokers.

He says: “The industry desperately needs to be regulated by the FSA. I think the secured loan industry needs to be like the first-charge market. FSA regulation will bring additional bureaucracy and additional hassle I accept, but I think it will help to put secured loans on an equal footing in terms of reputation, as first-charges brokers.

“Brokers will be able to give holistic advice, and the economics of the market will change because there will be greater transparency.

“The sooner we get that additional credibility factor by getting ourselves regulated by the FSA, the sooner it will help the industry.”

Machin also stressed that the AFB would survive the current stormy waters.

He says: “We’ve not seen a huge amount of brokers leaving the AFB because of market conditions, but we are in the eye if the storm at the minute, so we will wait and see.

“Will the trade body survive? Absolutely, but like everything it will have to reshape itself in accordance with market conditions, it is doing that and continuing to evaluate its role and its resources, but it’s here to stay and I’m confident about that.”

White Label Loans withdraws from self-cert

Secured loan lender White Label Loans has temporarily pulled out of the self-cert market.

The lender will no longer accept cases for self-employed clients and has given brokers until September 1, 2008 to submit cases.

White Label, which has never offered self-cert for employed borrowers, says it may return to the market.

Kam Sanghani, managing director at White Label Loans, says: “Given the current climate that we’re in, our focus has always been on quality lending, and on a status basis. From our perspective we temporarily want to remove ourselves form the self-cert market environment, for self-employed business only, as we have only ever done it for this type of business, and not for employed.”

FirstPlus confirms it will claw back commission

Barclays has confirmed it is clawing back commission from brokers on its FirstPlus range.

A spokeswoman for the lender says: “We’re not doing anything that we haven’t said that we would do in our terms and conditions and our contracts.

“We are clawing back commission on PPI sales that didn’t go through from August 2007 to January 2008.

“We will also be clawing back on any case that went into excess of two cases down, from the same period.”

“We would do this anyway regardless of what is happening with the business. We are telling brokers verbally and while they have not been ecstatic about it they do understand why we are doing it.

“In light of our announcement last week, we need to make sure that our business is in order for that.”

She says it is nothing new and something it has put into practice before. However, one broker says: “It seems like it is twisting the knife in a bit.

“FirstPlus got us to sign new contracts in April agreeing to new terms and conditions, which had some new clauses in.”

Secured loan market ‘shutting down’

The secured loan market is declining rapidly, with eight lenders having withdrawn from the market in the past twelve months, according to Moneyfacts.co.uk. Earlier this week, Barclays pulled the plug on its First Plus second charge mortgage business, one of the largest in the UK.

Since July 2007, a number of lenders have withdrawn from the market, including Alliance & Leicester, Capital One Bank and Money Partners.

Michelle Slade, analysts at Monefacts, explains: “Unfortunately, many lenders are no longer finding secured loans a viable business option.

“They face the same funding issues as mortgage lenders and with house prices continuing to fall, lenders can no longer be sure that, if a consumer defaults on their loan, they will have enough equity in their home to repay the debt.”

With prices falling, the second charge lender may not be able to recover its loan in the event of the borrower being repossessed. With many analysts now predicting prices will fall by 30%, there may be little equity left for secured loan firms after repaying the mortgage lender and fees in a repossession case.

Those lenders still in the secured loan market are also restricting their product range and raising rates to compensate for the risks involved, and Moneyfacts.co.uk says more lenders may suspend lending in the near future.

“If the credit crunch can cause one of the biggest lenders in secured loans to throw in the towel, it will be interesting to see if the other providers can weather the storm”, says Slade.

Positive offers 90% self-cert secured deal

Positive Lending has tied up with an undisclosed lender to offer an exclusive 90% self-cert secured loan product.

The 90% self-cert product requires no proof of trading, with a maximum loan amount of £30,000.

An 85% LTV self-cert deal has a maximum loan amount of £40,000 and current mortgage arrears are acceptable.

There is also a 75% self-cert deal which can include multiple adverse, with a maximum loan amount of £50,000.

Positive Lending is also offering a 75% buy-to-let product with a maximum loan amount of £100,000.

Paul McGonigle, managing director of Positive Lending, said: “I’m delighted to have secured this funding line in a market where traditional self-cert is hard to obtain.”

Unite slams job losses as Firstplus pulls out

Second charge lender Firstplus is to shut its doors to new business on 9 August.

The move will result in around 300 job losses with only around 130 people being retained in Cardiff to look after existing customers.

Neil Radley, managing director of Firstplus said: “In the past year we have tried a whole range of activities to develop our business but the market demand simply isn’t strong enough. We recognise this is a difficult time for our people and will be providing all those affected with support and assistance.”

The Barclays owned business said that “every effort” is being made to find them alternative roles across the Barclays businesses.

However, Unite, the UK’s largest trade union, has condemned the announcement.

Graham Goddard, Unite deputy general secretary said: “Unite are incensed by the decision by Barclays to cut around 304 highly trained staff. Whilst the union understand that the market conditions mean that the ‘First Plus’ product is no-longer viable, we whole heartedly condemn the decision to run down the Cardiff site.

“Unite are arguing that Barclays should replace the 300 jobs lost with work from other parts of the Bank. Barclays has few large centres in Wales compared to other large banks, which makes this decision all the more regretful. We are calling on Barclays to reconsider and replace these jobs in Cardiff.”

Unite says it has already secured agreement from Barclays to seek alternative employment for those who wish to remain employed in the bank, although these options are likely to be limited. The union has also claimed to have reached an agreement for enhanced notice and redundancy payments for those being made redundant.

Today’s announcement has no impact on the current loans of Firstplus’ 128,000 customers.