Press
Lehman under fire for same day product chops
Story by: David Pawsey Magazine: MortgageAdviser Published Wednesday , April 09, 2008
Lehman Brothers has been criticised for giving advisers limited notice of it stopping lending through its UK mortgage brands.
Last Wednesday Southern Pacific Mortgage Limited and Preferred Mortgages announced to advisers and packagers they had until 5pm to submit business. The lender has come under fire for the way the news reached intermediaries.
James Carter, principal for London-based IFA Independent James, said he was made aware of the decison through the media.
Mr Carter said: "I am registered with the two companies but I have not actually had an email specifically from them regarding that. They are not the best at communicating these thing sometimes. They have not been the best to deal with."
An email was sent to intermediaries just after 11am informing them of the product withdrawal. A notice was also posted on the SPML and Preferred websites stating the lender was withdrawing new originations from 5pm but would continue servicing business.
However this was almost two hours after a source close to Lehman Brothers had contacted Mortgage Adviser regarding the product withdrawal.
Alistair Neale, external communications manager for Lehman's Capstone Mortgage Services, said he was unable to comment on why some intermediaries had only been given six hours notice and they could not have been told earlier.
He said: "I do not have anything to add."
On its website Lehman Brothers said all applications must be received within 29 calendar days of receipt of the booking confirmation and the last date for applications to be received would be 1 May. Final cases were to be completed by 11 August.
Mr Neale was also unable to comment on whether the product withdrawal signified the end of the US investment bank's participation in the UK mortgage market.
In September 2007 the investment house announced it was dropping out of the second charge mortgage market in the UK.
As a result more than 170 staff were made redundant when the company dissolved its Southern Pacific Personal Loans and London Mortgage Company brands.
This was followed by a further wave of redundancies at the end of February when it was announced a further 200 positions were under threat.
But at the time Lehman maintained it would follow through with its intention of launching Lehman Mortgage Capital, an intermediary-facing mortgage brand.
Mr Carter said he did not expect Lehman Brothers to be the last lender to withdraw its product range and added the market was unlikely to settle down any time soon.
He said: "A number of lenders have effectively pulled out of the market anyway, with their pricing and their changes in criteria. I am just waiting for it to hit the bottom and bounce back again and who knows when that will be."