A post teaming up with new lender MoCo to offer mortgages

An Post will partner with start-up lender MoCo to enter the Irish mortgage market next year.

It comes at a time when non-bank lender ICS Mortgages has severely restricted its lending and Avant Money and Finance Ireland has sharply increased its mortgage rates.

These developments have led to fears that the main players in the mortgage market, AIB and Bank of Ireland, will partition the market with the exit of Ulster and KBC.

Bank of Ireland and AIB were strengthened after buying mortgage loans from the exiting banks.

Dublin-based MoCo is in talks with the central bank to gain accreditation as a retail lender, effectively a non-bank lender.

MoCo, which is funded by UK money markets, is understood to use the An Post brand.

However, according to a report by the Competition and Consumer Protection Commission (CCPC) produced when the Bank of Ireland applied for approval to purchase the mortgage book, the MoCo/An Post mortgage process is managed entirely digitally, with no paperwork and no branch network from KBC.

The CCPC report said: “As such, its business model is somewhat different from lenders such as AIB, PTSB and BoI, and also from smaller market players such as Avant Money, Finance Ireland and ICS/Dilosk.”

An Post has been attempting to enter the mortgage market since 2018 when it promised to introduce a mortgage offering that would undercut existing players by up to 1 percent.

According to the CCPC report, MoCo plans to launch green loans and expects to position itself as a strong player in the market.

According to the report, “A post office is expected to work with MoCo on entering the mortgage lending market.”

MoCo is the trading name of a company which was registered in Dublin last year as Cedar Lending Services.

It is led by former AIB banker Patrick Good, who has worked at Banca Mediolanum, Key Capital and Davy Stockbrokers.

An Post has long had ambitions to offer mortgages but has struggled to reach an agreement with a financial partner.

Meanwhile, another startup — Nua Money — is seeking central bank approval to operate as a bank-independent digital mortgage lender.

It plans to use technology to speed up the loan approval process, backed by experienced underwriters.

Non-bank lenders are struggling as funding costs in the money market have skyrocketed, forcing existing market players to raise their mortgage rates.

Finance Ireland recently hiked its mortgage rates by as much as 1.2 per cent, Avant Money hiked rates by up to 1 per cent last week, the second hike this year, and ICS Mortgages has severely restricted its lending.

On the other hand, banks have direct access to cheap mortgage financing from their bulging deposit books.

A spokesman for MoCo said it looks forward to offering Irish borrowers a strong mortgage alternative.

“But for now, we’re focused on our regulatory approval process and developing our operational capability,” they said.

One post declined to comment on the move.

https://www.independent.ie/business/personal-finance/property-mortgages/an-post-linking-up-with-new-lender-moco-to-offer-mortgages-41917168.html A post teaming up with new lender MoCo to offer mortgages

Fry Electronics Team

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