00:00Constantine, what do we know about, you know, tell us about MFS.
00:04What does this business do and who has exposure?
00:08Right. So MFS is a specialist mortgage firm.
00:11It provides finance for things called mostly things called bridging loans.
00:16So it's a short term loans for people who want to sell a property and buy another one.
00:20It's a niche area of finance that, you know, big banks usually don't get involved in.
00:23And then it services.
00:24So the way it works is it borrows money from big financial institutions, has a has a mortgage portfolio, services
00:32those those loans and makes make some money off that.
00:36Now, what happened is this this company fell rapidly into administration this week.
00:42And we've discovered that major financial institutions have over two billion pounds of exposure to this.
00:51This includes Barclays, Jeffries, Apollo's secured products arm, Atlas.
01:00And yeah. And as you said, now TPG.
01:02And now we haven't seen authorities accuse anyone of wrongdoing, but there have been allegations of fraud.
01:09Is that right? Who's that coming from?
01:11And tell us about what exactly the fraud would potentially be.
01:15That's right. Right.
01:16There have been some very serious allegations of fraud.
01:18This comes from two entities within the broader MFS group that went into administration a week ago.
01:26And the feel that the allegations are that MFS wasn't paying the interest due into the correct accounts.
01:35So there's over 200 and 200 million pounds that's gone missing, I would say.
01:42And then the second allegation is that that they were that MFS was double pledging collateral.
01:48So it was using collateral that was getting from one lender and using that again over over and over.
01:57So basically or not over and over twice.
02:02So we have. So according to the legal documents, these lenders estimate or warn that there could be about a
02:11930 million shortfall and resulting from this double pledging.
02:16So these are huge sums.
02:17What does it tell us about the broader credit environment?
02:22Is it fair to assume that this is potentially suggesting broader credit fears or right now is this just a
02:29one off?
02:31I mean, every time we hear about one of these stories, you know, people come out and say it's a
02:35one off.
02:35But there's a point at which I guess when, you know, this becomes a trend.
02:39This is we saw a similar and we had trickle or first brands, which were so.
02:47So, yeah, I mean, it's I think it's a warning sign definitely that people and I think investors are going
02:55to be taking a close look to especially to this specialist mortgage sector.
Comments