Following Chetwood Financial’s recent rebrand to Chetwood Bank, Jessica Bird speaks with Darrell Walker about the launch of ModaMortgages, and the plans for the fledgling lender.
Talk me through the process of building ModaMortgages over the past couple of years.
It’s been an amazing two years. The great thing has been having the opportunity to build a lender, build a team and build a proposition from the ground up. I’m now looking forward to doing the job I came here to do, which is being out there interacting with brokers and selling mortgages.
We’ve taken our time because you only get one chance to make a first impression. We’re fortunate that our investors have been really understanding of the way we want to get there.
The recent launch of Chetwood Bank will also be fundamental to our journey. Being part of a diverse and well-funded bank with strong investment will give brokers and borrowers the reassurance they need that we’re here for the long-term.
What is your current case profile? Do you have an ideal client base?
We can handle all types of cases, such as first-time investors, limited company landlords, and houses in multiple occupation (HMO) and multi-unit blocks (MUBs). We’ll also consider adverse, and we can make a judgment call on properties situated close to commercial premises.
We don’t do separate pricing for limited companies, or an HMO pricing structure. For HMOs and MUBs, we only want 12 months’ experience.
Overall, it’s about being ‘smarter, faster, simpler’. Our product set and our pricing model is easy to understand. We’ve got a good heartland proposition.
Where we’ll really come into our own, however, is in that access to the underwriting team, the ability to pick the phone up directly and access an exceptional support team. It’s dependable, reliable, and if you need the support, it’s there.
The majority of what we’re doing in this space is complex, so the more that we can do to help from an education point of view, and to simplify that wider buy-to-let (BTL) piece, the better.
Looking back over the turbulence of the past few years, was it more important to take your time and shore up the proposition?
We’re going with what we’re calling a ‘controlled launch’ to start with, with specialist distributors and packagers – those that understand how specialist lending and BTL works. It’s a group of people we’ve got a good relationship with and who are well respected in the market.
The one thing that we’ve homed in on initially – and which I think is important to brokers – is delivery. We are going to do the basic things really well – that’s our mantra: smarter, faster, simpler. That’s what we stand for.
There’s a team in the field, or if you need to, you can speak to an underwriter, a decision-maker. You’ll have a direct contact when the case comes in, we’ll be quick, and we’ll be consistent.
Feedback tells us the market’s looking forward to us coming into that space, as we’ve got the teams built out with mortgage expertise, right from the chairman down. We’ve got a lot of experience and industry knowledge, which helps provide confidence.
Over the past few years, we’ve had Brexit, Covid-19, the mini-Budget, the Renters’ (Reform) Bill – there’s always something coming down the line in this industry.
This market is very good at adapting, at working out what the next step should be. One of the things that we need to do as lenders – and I think the lending community does do this pretty well – is to help, support, educate, inform, put an arm around brokers, investors, and the people that we deal with.
When these hurdles appear, too many people will go towards doom and gloom. But the intermediary market is pretty good at having the glass half full.
That’s why this is a good opportunity to come in, bring some more competition and education to a market with some superb lenders in it.
For us, the education piece is key, because there is a lot going on – there’s always a topic that we can support on.
Once the basics are in place, is the plan to build on that?
In five years’ time, the plan is for this to be a true specialist lender, perhaps with residential and additional niches – we want to do the full spectrum of specialist lending eventually. For now, however, our focus is on BTL and building trust in the brand.
We’re not trying to sidetrack anyone with lots of jiggery pokery. What you see with us is what you get – an open and transparent lender who’s dedicated to making it smarter, faster and simpler to place your cases with.
What is it about your own history that lends itself to your role with ModaMortgages?
I was the youngest bank manager in the UK! It may only have been the school branch of Midland Bank but not bad for a 14-year-old. For many reasons, it was something I quite enjoyed – I was good at maths, I always wanted to work for a bank, and the rest is history.
I joined National Westminster Bank straight from school and went into their management development programme – one of those where you spent a period of time doing a bit of everything. I started in the machine room processing cheques before progressing to cashiering and beyond. It gave me a real understanding of the banking environment, back when the only target you had was how big the queue got in branch at lunchtime. There were humbling days, and there were good days, but it gave me a great grounding and foundation to build a career in an industry I love.
The branch I was in shut down after four or five years, and I got moved into a service centre, never seeing a customer, and I absolutely hated it. It made me realise my passion is being out there and being with people.
Fast-forward, and I was part of the original pilot team that built the Barclays Intermediary proposition back in 2000. Later I went on to Shawbrook and had good success there, and my proudest moment is what I achieved at OSB.
I’ve been fortunate to work with some great people. I’ve had some wonderful bosses over the years, and I’ve learned a lot from all of them.
One of the things I’m really keen on with this role is bringing new blood through. You’re only as good as the people around you. The best teams I’ve been on have had these things in common: being hardworking, genuine and likeable.
These are all skills you can’t teach. People have either got them or they don’t. I can give you a rate card or a lending policy, you can learn it, but I can’t teach you how to be a good person.
How is this reflected at Chetwood Bank and ModaMortgages?
When I joined Chetwood Bank, we were maybe about 100 people. The bank now has more than 300 people. We’ve grown massively.
What we’ve tried to do with building out not just the sales team, but the whole mortgage function, is to look for those skills that you can’t teach.
We’ve got experience within the business, we’ve got some seasoned pros. But we also have some newer people who I’m convinced will be absolute rockstars – tenacious, hardworking, sincere, likeable.
With ModaMortgages, I want to create a team of people that, to some degree, the market doesn’t know – new faces, with all the skills to be successful.
We’ve applied the same approach when we’ve built out other functions. We’ve got a group of underwriters that aren’t scared of picking up a phone, and who want the brokers to be able to do the same.
How does this fresh perspective help when setting up a new lender?
I’m not perfect, and I regularly want people to challenge me and point out when I’m missing something. These are really fresh pairs of eyes – so that’s something else they bring to the table: a different way of doing things.
It’s all part of the master plan. The new kid on the block, a new face, or a new lens – there’s an excitement that comes along with that – and then, behind the scenes, there’s a lot of experience.
It also combats the fact that this industry can be a bit of a closed circle, with the same BDMs just changing the colours of their name badges.
How do you balance this human approach with tech?
Technology is a big part of what we want to do. But our proposition is hybrid.
We want to use tech to make the experience smarter, faster, simpler. The system is very intuitive – it makes decisions as it goes along – but we don’t want to do that to the detriment of relationships.
When things aren’t quite right, or brokers need some help and support, a computer can only do so much for you, but actually there’s nothing better than knowing you can pick up the phone to a relationship manager or underwriter if you need to.
How is the controlled launch going to work?
It’s 11 firms – a good group of packagers, that have got relationships with networks and clubs. What it means is we’ve got just 11 people to look after, and that gives us a really strong foundation to continue to look after them and progress into national launch.
Ultimately, we want to make sure that we do it right, and that we deliver. That’s why the controlled launch is really important.
We’re lending real money, these are real brokers, borrowers and real investors. But this isn’t a mass market proposition at this point. It’s not about getting as much as you can through the door, and then suddenly finding that your service levels are at 30 days and people are screaming at you because you’re not delivering.
After two or three months we’ll look to stretch our legs a bit, but only if we’ve delivered and that reliability is ingrained. A big part of that is certainty for the broker. If we say we’re going to do it, we will do it. That’s why, for us, that control early on is important. If we turn the tap on too much and spill over, everything we stand for goes out the window.
Everything we do, we’re starting with the broker. It’s about them trusting us with their client.
What does that relationship with the broker look like?
One of the things we’re building now is a broker charter. That will give some key fundamentals around where we stand on product transfers, or rate withdrawals.
Again, we want to be a go-to lender that people know is well-funded and part of a bank.
The intermediary sector is responsible for something like 85% of lending in the UK, and that number creeps up almost year after year. Specialist lending is an important part of supporting that growth.
For brokers, if you’ve got a client in front of you with a specialist case and you can’t handle that, the client will go and find a broker that can.
It’s our job to help educate and support brokers, to help them write those specialist cases.
As a lender, you should always start your journey by putting yourself in the brokers’ position. If you look holistically, I think the specialist sector is pretty good at that, and looking at the greater good as well – doing what we can to help raise the profile of our market.
Are landlords in increasing need of specialist support as the market gets more complex?
The market is in a different place to what it was two, five or 10 years ago. I’ve got no doubt that it will continue to throw out challenges. But this is an industry that will always find a way through it, whether it’s coming together as an industry, or just getting your head around the different dynamics.
A BTL borrower today is looking for something very different compared with what they would have been 10 years ago. For instance, there’s the green agenda. People are looking at their portfolios and wondering what they can do differently.
Several years ago, a lot of people didn’t really touch new-build, but a lot of investors now quite like it, because it’s likely got a better Energy Performance Certificate (EPC) rating. It’s a specialist you can go to for this stuff.
This is also a market with more complex properties, like HMOs and MUBs.
What are some other big trends or challenges you see coming down the line for BTL?
It’ll be interesting to see what impact the Budget has. Obviously, we have the Renters’ Reform Bill, that’s one of the hot topics. You’ve also got implications of Capital Gains Tax, the ESG and green agenda – there’s already a lot.
If you look as far down the track as you can, there’s a lot of hurdles, but there’s none at the moment that I think is a catastrophe. It’s just about how to navigate around them.
The professional investor that’s been in this a long time, they can still spot an opportunity, and there are still plenty. They’ve perhaps got their eyes open to a wider scope of opportunity, because they’re seasoned pros.
Just because these people did things a certain way a year or two ago doesn’t mean that’s going to be the way they do it in six months, 12 months, or two years’ time. You adapt to what’s in front of you, and the challenges are there and clear for all of us to see, we just have to support each other as an industry.
By the time we get to the end of this year, we’ll have had a sticky 12- to 18-month period. But the world has still turned. Lending numbers are still good.
Investors will continue to get a little bit more confident in what they’re doing. That’s something to build on.
It’s very easy to get drawn into the ‘here and now’, but if you look at the bigger picture, that’s palatable, even if we have had some shocks to the system – they haven’t been the end of the world.
What will ModaMortgages’ role be in helping people get over those shocks and hurdles day-to-day?
We can do everything to support them, particularly from the education point of view. We’ve got a lot of expertise within the business around all these subjects.
We’ve got a new, fresh, different group of people, but the expertise that sits behind it is still significant – we’ve got the T-shirt.
What milestones are you hoping to achieve in the first year?
We want to build a brand you can trust, where people know what we stand for. That’s when we will start to spread our wings with distribution and write bigger volumes.
More than that, I want the team to be recognised and welcomed by the industry. It has been really humbling to build a team like this, it’s such a good feeling seeing it all come together, and we’re all very excited for the national launch – everyone has bought into what it is we’re trying to do here which is to be smarter, faster, simpler.
