In the Spotlight with Jim Robinson, Evolution Money
“I’m not sure there is a ‘typical’ borrower when it comes to seconds, but there are certainly some common themes in terms of what second charge clients are using the money for.”
We spoke to Jim Robinson, Head of Strategic Partnerships at Evolution Money, about why the second load industry is in such a strong position after Covid and why payment holidays could create a new group of mortgage prisoners.
FR: Second mortgages often make the headlines in terms of underwriting and whether the industry is growing. Where do you see the industry right now and what can it achieve in the rest of 2021 and beyond?
I think the sector is in a strong position. The second charge has always been a resilient industry. The stamp duty initiative has overcooked the first load market, but this will stabilize when the holidays expire, leaving more possibilities for a few seconds. There are a lot of people trapped in mortgages and the need for debt consolidation will be strong, so I think the second load industry is well positioned to provide a solution to consumers after Covid-19.
EN: You recently launched the Evolution Money second load tracker – what does this describe in terms of “ typical ” borrowers and how they intend to use second load mortgages?
I’m not sure there is a “ typical ” borrower when it comes to seconds, but there are certainly some common themes in terms of how second-load customers use the money. Having said that, we have divided our borrowers into Debt Consolidation and Preferred Pools. The former tend to have different degrees of debt / substantive arrears etc, and are specifically looking for a second charge to pay off that debt, whether from another financial provider or, for example, car financing, etc.
Major borrowers, as the name suggests, do not have these adverse credit problems and we are seeing more and more customers bending to this bill. They might not be able or unwilling to remortgage their first charge, but still want access to the equity they have built up, and again, while they are using the second charge to pay off their debts, they are also likely to use it for the home. improvements, etc.
EN: As we come out of the lockout, where do you think the pinch points will come for the finances of many people? Does this indicate that there will likely be more acceptance of second charge mortgages?
There is no doubt that the pandemic has had a significant impact and influence on the finances of many people, and they may have had to take payment holidays as a result, or saw their incomes temporarily drop, be on leave or have had to change jobs. The fallout will likely be with us for many years to come and could fundamentally change the financial situation of many existing owners.
I suspect, as stated, that we will see a large number of second load customers using the proceeds to consolidate debts they may have accumulated over the past year. Additionally, it will be interesting to see how first-charge lenders ultimately perceive the creditworthiness of those who have taken a vacation. We all know these aren’t supposed to show up on credit reports, but I’m sure lenders take them into account when making their lending decisions. We think we’ll see a new group of “mortgage prisoners” as a result and I think they will increasingly be looking at second load products as a way to end before they can remortgage their first load product.
FR: What professional career has brought you to Evolution Money? What are you passionate about in this industry right now?
I have been in finance for over 20 years as a financial advisor selling investments and pensions at Friends Provident. My introduction to the middle world was made by bringing the Virgin One account to the market. It was there that I realized how great a market it is and how filled with really great people. These relationships are still strong today. The mortgage market is a small world, but it is a great world.
The increasing use of technology is the exciting part of what we do. The industry is adopting excellent consumer-centric technology solutions. Finance is an old industry with fixed paradigms and stuck consumer behavior. It is our responsibility to protect consumers and take them with us on the journey, to educate them and bring them into a world of state-of-the-art finance. I think we can create products that truly reflect the needs of generations to come.
EN: How did you find the lock? Was there something specific you couldn’t have done without?
I found the lockdown difficult if I’m being honest. I am a social creature and this lack of interaction with friends and family has been extremely difficult. I introduced a puppy to the family just before the first lockdown, the disciplined routine around the new arrival really saved my mind. I always thought I hated the routine, but even a small amount is vital to keeping the mind fit and well. I also have to admit that I missed a cold pint (or three) in a pub.
EN: What do you see doing next?
There is still a lot to do with Evolution Money. Lots of good plans and initiatives to develop and expand the market. The financial market is my home. I can’t see myself moving away from it anytime soon – I would miss people. Plus, I should have studied harder in school.