It’s time for reflection of the last three days here in Barca. To readers, this must seem like a pretty decent gig to be at but with over 60,000 steps done over three days, and with meetings from early morning until late at night every day, yes it is a fantastic event for many reasons, but is hard graft!
I have been very fortunate to have many meetings whilst out here with great businesses, including clients like Keystone, Lendco and BCM Global; partners and industry contacts such as MIAC, Rockstead and CSC; and also some fantastic representatives from major lawyers, agencies, consultancies and other parties that make securitisation transactions a success.
A couple of take homes from the conference are as follows.
BUILDING SOCIETIES
At this year’s BSA conference in May, it was interesting to see a focus on credit risk and a significant sponsor of this Global ABS, global rating agency KBRA, had representation there.
This clearly reflects the future importance the market feels wholesale funding will have on the Building Society sector and my discussions here reflect this.
The amendment to the 1986 Building Society Act, that effectively allows Building Societies to raise more funding from other sources than the usual model of funding through deposits, puts them more on a par with banks now in terms of funding mortgages.
This provides great opportunity both in terms of volumes and also product diversification from their traditional model.
LATER LIFE LENDERS
Aviva’s recent highly successful transaction shows that equity release is seen very much as a decent securitisation asset class in the market.
Conversations here with lenders and funders alike indicate that both established institutions and new funders are open to funding the UK later life market.
Interestingly, there is an appetite to move equity release books to servicing platforms and providers that can bring servicing costs down, and certainly this reflects the amount of migrations of equity release assets we are seeing onto the Phoebus servicing platform.
There is also funding for building and expanding existing equity release lenders in Europe. France, the Nordics, Spain and Italy have appetite amongst other countries.
There are potentially big opportunities for funders looking to diversify into other regions. North America, and in particular Canada, have a vibrant market in equity release and expect this to continue to grow.
CRITICAL FOR FUNDING
Overall, the securitisation market will remain very healthy and a critical form of funding to the mortgage lending industry.
There are plenty of originators looking to sell and plenty of investors looking to buy, which means future liquidity in our market looks like it will remain strong for the long-term.
The winners are those who work with partners who have a track record in delivering securitisations and that can bring both tech and expertise together under one roof to make the process as seamless as possible.
I can honestly say, from a Phoebus perspective, we are well placed to continue to support our clients in the critical areas of servicing for our clients that securitise.
