Making the complex simple

We are seeing an upward trend in adverse sourcing and advisers are now increasingly likely to be contacted by borrowers with adverse credit.

Recent research by Pepper Money and YouGov showed that 15% of 4,094 adult respondents had experienced missed payments, CCJs, defaults, unsecured arrears, and secured arrears in the last three years. 17% of these intend to buy property in the next 12 months which the research estimates to be 1.34 million people nationally[1].

Crucially, 57% of respondents with adverse credit who are looking to buy or remortgage said they would seek advice from a mortgage broker, up from 40% in 2019. And with the current challenging economic climate compounded with the growing strictness of firms issuing defaults, these numbers look set to grow. Whilst this rise in business is good news, it poses a problem as there is still only a small proportion of lenders who provide adverse credit and, due to the pandemic, lenders have struggled to maintain service levels meaning fewer options are currently available[2]. In addition, to service this demand, many mainstream lenders are reducing the threshold for specialist credit to maintain their service levels. So where does this leave you and your customers who need more lending options, especially those with adverse credit?

Embrace technology

Criteria sourcing, including adverse sourcing, can be assisted with the use of technology. For example, with Criteria Hub you can select up to 6 criteria at once using its multi-search function and then easily browse the results alongside any policy notes and warnings for each criteria. Advisers are turning to such solutions as the complexity of cases heightens which is reflected in the search behaviour of the platforms’ users.

In May, criteria searches for ‘Default’, ‘County Court Judgement’ both experienced a sizeable increase whilst ‘Late Payments (not missed)’ surged month on month from in May 35%, in June 22%, and then a further 18% in July. [3]

In addition, there was a spike in searches for ‘Current Payday Loan’ criteria which increased by 40%. However, the largest rise was experienced for the search term ‘Financial Associates with Adverse’ which indicates if a lender can potentially accept residential applications from an applicant who is financially associated with someone who has adverse credit. There was a huge spike in this search in May with a 75% increase month on month.

This emphasises the power of Criteria Hub’s multi-search functionality and its growing usefulness for advisers who would otherwise have to manually visit each lender to check their criteria and policies. As Criteria Hub collects detailed information directly from the lenders, you can be confident it is highly accurate.

The time-saving abilities of the platform is further bolstered by the recent integration with Mortgage Brain product sourcing solutions which provides:

  • View a multitude of lenders including mainstream lenders that have specialist lending thresholds.
  • A single process quickly provides you with a list of lenders that have the specialist products needed and shows which products are available.
  • A focused view that shows only matched schemes, and filters out non-matched products.
  • A straightforward comparison process as the most applicable products are bundled together on a like-for-like basis which makes recommendation and justification simple.
  • All product information is provided directly by the lender to give you the most accurate information available.

Previously, you may have found it hard and time-consuming to compare results requiring you to cross-reference lenders with the panel in MortgageBrain product sourcing but that is no longer the case with integration of these solutions. Furthermore, with extensive documentation you can uphold the highest levels of compliance and keep a record of your journey and justification for complete peace of mind.

To find out more about how our solutions can streamline your sourcing process or to take a 30-day free trial of Criteria Hub, contact us at sales@mortgage-brain.co.uk.


[1] https://www.mortgagesolutions.co.uk/news/2020/03/09/brits-with-adverse-credit-increasingly-likely-to-contact-a-broker-pepper/

[2] https://www.mortgagesolutions.co.uk/specialist-lending/2020/06/25/were-already-seeing-more-clients-with-adverse-credit-and-need-more-options-dale-jannels/

[3] Insights from the Criteria Hub platform, August 2020