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Matt Cottle: Second charge loans to be given new lease of life

Jessica Nangle catches up with Matt Cottle and discusses the launch of the latest addition to the Y3S suite of IT products for brokers.

Second charge loans currently make up 2% of the capital-raising mortgage market and have had a difficult run thanks to MCD changes in April 2016.

And Finance and Leasing Association figures show that second charge mortgage new business grew 8% by value and 15% by volume during the first quarter of 2017.

With the market growing Matt Cottle, chief executive at Y3S, has been working on a free web-based API (application programming interface) tool that will allow second charge loan brokers to transfer their loan applications to lenders in seconds.

Y3S has launched several IT solutions for brokers including miloanbroker.com. Launched in 2011 the system was designed for mainstream mortgage brokers to gain access to second charge mortgage quotes from all specialist lenders.

Moreover, the system compares loan quotes against live mortgage products, displaying the savings in a matter of seconds.

Now reaching version 8.2, with 7000 brokers registered and £100m of completed loans, Cottle is determined to make his latest product revolutionise the industry, giving it a chance to thrive and prosper.

“Loan brokers need technology to survive and to grow the market,” Cottle explains. “Speeding up the industry will make the business more prosperous for all. It’s a free tool, which eradicates the time-consuming task of multi-keying applications into lender portals.

“We are not inventing new magic here; we are adjusting technologies and applying them in a very specific way that works for second charge brokerages.

“There is no point in everybody trying to build a different API solution when we’ve already built ours and are testing out daily on the UK’s largest second charge brokerage.

“If we don’t make this system available to everybody, then every other broker is going to have to somehow make their own version of this software and if they don’t they will struggle to survive, and thwart growth,” he says.

The emphasis on technology is undeniable, and post-MCD this became more important for the longevity of the industry.

“We had to work really hard because the entire lender systems changed and the whole format of doing a secured loan change,” Cottle explains.

“Lots of second charge mortgage brokers simply can’t, won’t or don’t know how to invest in technology.”

Cottle’s team are currently building a general release version of their internal product that they will launch to mortgage brokers and other second charge brokers free of charge in the coming months.

The system has had a positive effect on Y3S and as Cottle says, has “helped make Y3S a more successful business.”

However, Cottle’s main focus is for his technology to improve the output for all in the second charge industry, increasing the £1bn share it currently holds.

“We are hoping that every broker employs this free technology so it can become industry standard. Quite simply, those who have it will have an edge over those who don’t.

“We want the industry to thrive, we are part of that industry, we are the biggest player in the broker to broker seconds space, and we’ve done it via the application of technology – it just makes everything easier.”

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