Edeus's drastic discount deal aims to increase liquidity

Edeus's drastic discount deal aims to increase liquidity


The mortgage lender Edeus, established in the heights of subprime confidence in 2006, has no plans to be flattened by the credit crunch. In an unusual move, acknowledged to be ‘bizarre’ even by their spokesman, they are offering around 400 selected clients the chance to redeem their mortgages early in return for an 8% discount.

The company has launched the initiative to raise capital and continue lending, although they will certainly make a loss in the process. Manager Alan Cleary described the bid to remove loans from their books as ‘the lesser of two evils’ and quipped that ‘Edeus has never been interested in doing things the traditional way.’

Cleary’s ‘straightforward solution’ to the impossible securitisation markets and need for liquidity aims for a more direct link to clients, and seems a maverick quick-fix for their larger problems.

However, Edeus firmly attest that they will include intermediaries in their plans by informing them early and offering proc fees when their customers remortgage. Cleary highlights that ‘while other lenders are cutting brokers out of the deal [Edeus] are supporting the market by introducing the client back to the original broker.’ It is thought that around 20% of selected clients have responded positively, but only time will tell if this tenacity will pay off.

Lucy Thackray

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