Fintech lender Molo pulled all its buy-to-let mortgages yesterday (April 27) after it admitted its next tranche of funding was not ready to launch.
Advisers were not notified of the withdrawal, meaning brokers had to call the lender to find out why their cases had been moved to ‘unsuccessful’.
One broker, Halcyon Griffith of Private Finance, told FTAdviser the sudden withdrawal has wasted weeks of his client's time.
They were unable to get a mortgage with other lenders due to their credit score, which is why Griffith went to Molo for its more flexible approach.
Having submitted the case on April 14, it was quickly accepted, underwritten and then agreed subject to valuation on 26 April.
After spotting the ‘unsuccessful’ status of the mortgage yesterday, he went to the lender’s website which had added the banner: ‘Molo has temporarily suspended its buy-to-let products and won’t be receiving buy-to-let applications for the time being.’
After using the buy-to-let specialist’s live chat at 3pm yesterday, he was sent a pasted message from Francesca Carlesi, Molo’s chief executive and co-founder, today (April 28) at 11:30am.
In a letter, Carlesi said she understood this was frustrating and “not the news you and your customers would have been hoping to hear”.
She put the withdrawal down to finishing a tranche of funding earlier than expected, meaning its new tranche was not yet ready to launch.
For any advisers whose client have already paid for the valuation, an "automatic" refund of this fee will be sent to them.
“We’re working hard to re-launch with a new buy-to-let product range as soon as possible and we’ll keep you in the loop with relevant updates,” said Carlesi.
The lender said it will be sending an email to advisers’ customers “soon” to let them know directly and encourage them to get in touch with their brokers.
It also reiterated that it has “performed very strongly over the past year”, and that the withdrawal is not an issue of lack of available funding, but an adjustment motivated by pricing and product terms.
FTAdviser has asked Molo why it did not give advisers and their clients prior warning of its sudden, temporary exit from the market. The company did not respond to these questions but did issue a statement.
It said: "We’re progressing well to restart taking buy-to-let applications and we can’t wait to bring our innovative, digital proposition back to the market.
"In the meantime, our residential products aren’t impacted and we continue to welcome applications for owner occupied mortgages."
Griffith said the disruption has wasted two weeks of his client’s time and caused them stress, as well as costed the advice firm much of its own time.