Home Loan Experts’ skill in writing non-conforming loans has been rewarded with an $8,450 grant from Pepper.
The Sydney firm was one of several mortgage brokers that won grants through a campaign run by Pepper in 2013. Pepper rewarded brokers for the quantity and quality of their settled loans. The grants must be spent on business-building items such as advertising, website design and training courses.
Home Loan Experts has used Pepper loans to target non-conforming borrowers, said managing director Otto Dargan.
Mr Dargan told The Adviser that more than 25 per cent of the firm’s loans were non-conforming – and that only 0.4 per cent of its entire loan book was in arrears.
The firm has a strong understanding of credit risk because most of its brokers used to be credit managers, he added.
Mr Dargan said borrowers with bad credit histories require more work, but turn out to be more loyal clients.
“We strongly believe that non-conforming is about the end solution for the customer. That means using a strategy to get them back to a prime loan,” he said.
Mr Dargan said Home Loan Experts would use its Pepper grant to fund seminars for first home buyers. He said the seminars had been generating a lot of non-conforming leads. “It was something we didn’t initially expect, but the numbers speak for themselves,” he said.
Home Loan Experts has a loan book of $700 million, according to Mr Dargan, with Pepper numbering the group among its top five brokers.
A Pepper spokesperson said the non-bank lender believed it was important for brokers to reinvest in their businesses through initiatives like Brand Hand.
More than 700 brokers registered for the campaign, according to Pepper.