Welcome to the newsletter from HomeLoan Partnership, designed to keep you up to date with topical market news, sales ideas for your business and developments in the HomeLoan Partnership proposition.

You will have noticed that spring is here at last and there are now more daylight hours than darkness. This is meant to lighten the spirit as we move towards the summer but for many the effects of the credit crunch continue to impact on business volumes.

After some 8 months of disruption to the market many mortgage brokers must be wondering what the prospects are for the rest of 2008. As lenders continue to withdraw products, tighten criteria and even offer deals direct that are not available through brokers, there is still no sign of a turning point in sight.

The good news is that there are still plenty of prospects. The trick is to find mortgage products for them! The base rate decrease will help to maintain the momentum, even if we accept that 2008 is not likely to be a prosperous year for many.

One massive opportunity presents itself in fixed rate borrowers coming to the end of their initial period and facing a hike in rates to the lenders Standard Variable Rates. Figures produced by the CML suggest that borrowers reverting to SVR from the average fixed rate mortgage in 2005 could face over a 35% increase to payments!

Some brokers feel that lower maximum LTV for mainstream mortgages reduces any remortgage opportunity but the same CML statistics show that the average 2005 fixed rate borrower had 22% equity in the property and more than adequate income to support the loan.

So, around 1 in 5 households in the UK represent a business opportunity. Awareness of the problem has never been greater and there is 'free' national advertising - just thumb through any daily newspaper. Are you engaging with these prospects?

Why do some mortgage brokers seem to have been less affected by the credit crunch than others? An existing client bank producing active referrals helps, as does a good spread of business and solid introducers.

Lastly, resilience to market changes and the ability to sell alternative products means that every opportunity can be maximised. Visit the HomeLoan Partnership ancillary section for ideas of products to sell.

If your mortgage volumes have dropped why not take a constructive look at your business and use the spare time to your future advantage. Here's our 6 point plan:

1. Bring all of your clients review dates forward by a few weeks. Lenders have been contacting clients early for review and you could be caught out.
2. Identify all clients over the past 24 months that did not complete mortgage protection through you - call them to check if they have it in place. You will be surprised at how many simply did not bother.
3. Spend some time looking at other product areas that you may not be optimising purely because of unfamiliarity. The most profitable would probably be secured loans, commercial loans and overseas property investments.
4. Review your existing website or create one if you don't have it already. Hosting solutions are inexpensive and can improve your brand image and create leads.
5. Look for local introducers. Any centre of influence for people that have, or may want mortgages. These would include Estate & Lettings Agents, Solicitors, Accountants & Bookkeepers, large firms and social networks.
6. Create & distribute some local flyers. Your local print shop can help to design these and you can generally print around 10,000 for the cost of one average procuration fee.

HomeLoan Partnership provides products, marketing and active advice to member firms to help them develop their businesses.

You probably sell mortgage protection on a Joint Life, First Death (JLFD) basis but many of your clients will have children and will be underinsured. You can improve their overall position at very little cost by doing an alternative quote for twin single life policies. This has two benefits; Firstly, if one of the partners were to die it leaves the remaining partner with a continuing life policy at a time where their liability will certainly continue. Secondly, if they were to die together, double the sum assured would be available for any surviving children.

The easiest way to approach this is to provide the JLFD illustration (for say £20.00 pm) and then ask whether, if you could effectively double the cover between them for an extra (say) £4.00 per month, they would think that this was good value. Remember, they are more likely to be receptive if they have accepted there is a shortfall already.

The net result is better cover for your clients and (up to) £85 extra commission for yourself (based upon HomeLoan Partnership rates)

Round Up

If a shortfall exists but there is a reluctance to take out a separate life policy, suggest that the client should 'round up' their premium to create a free surplus that would help on death. A few pounds extra per month can often create a very useful cash sum.

Remember that when you cover only part of the shortfall with a client you should make this clear on the demands & needs statement.

One of the most successful methods of keeping in touch with members, improving sales and introducing new products has been the regular broker forums held by HomeLoan Partnership. These continued in April 2008 and, amongst other topics they introduced the following:

• Overseas property opportunities suitable for UK Buy To Let investors.
• A digital print on demand facility for pre-approved marketing items.
• New comprehensive debt management software to identify sales opportunities.
• Improvements to the small commercial loan offering.
• Lead generation provision with a 20% discount for members.
• Structured deposit term savings from a building society.

To be a part of these forums in the future with a network that constantly strives to innovate, enquire via telephone or click here to enquire about AR status.

Directly Authorised status has been lauded by some as offering total flexibility on how to operate your business whilst sitting 'under the radar' of the FSA as they focus on the larger firms. Not so for the future, the FSA have made it quite clear that the TCF initiative will reach everyone.

Workshops run by the FSA confirm that they will cascade investigations into treating customers fairly down to small firms level using telephone audit and personal visits.

In a speech made by Sarah Wilson, FSA Director for TCF in Nov 2007, she said:

The first deadline for having in place management information to support your TCF programme was 31st March 2008 - have you met this?

Not surprising as the regulations are not easy to transpose into practice and it takes time to do this, time that the average DA broker simply does not have. So what is the option? You could consider a move to Appointed Representative status and let us do the work and translate the regulations into simple to implement procedures and with no loss of independent status.

Existing Appointed Representatives should rely on their network to provide concise information on how to comply with TCF - if they have not already done so then you have to question if they themselves have embraced this.

HomeLoan Partnership regularly issue guidance on TCF and have just provided member firms with a full management information system to support both TCF and sales development. We welcome applications from DA firms that feel now is the time to consider network membership.