Publication Date: Tuesday, 6 October 2023
This article originally appeared in KangaNews

Brighten Home Loans has continued to expand its presence in the Australian dollar securitisation market, with increased funding volume the product of the lender’s ability to leverage technological advances to enhance its origination platform and accelerate its growth.

There is plenty of room in the market for further growth, says Adam Moore, Brighten’s Sydney-based head of funding and securitisation. Brighten began its operations in 2017 with an initial focus on the profitable niche segment of lending to nonresident borrowers. This strategic approach has paid off, the lender says, enabling Brighten to expand effectively into a wider range of market segments.

It now offers a comprehensive range of prime and nearprime products and has grown its workforce to nearly 100 employees. Such has been the evolution of the business that resident mortgages now represent the largest proportion of Brighten’s book.

The lender has also successfully expanded its distribution by forming key partnerships with leading national aggregators. As a result, Brighten has bolstered its distribution footprint to cover more than 12,000 mortgage brokers.

Moore affirms that Brighten is committed to serving under-served segments of the lending market. These include prime PAYG customers and also the self-employed, expats, nonresidents, and those in need of alt-doc and bridging finance solutions.

Brighten is confident it will meet its ambitions to grow market share further, Moore adds, particularly with the support of demographic trends such as the steady rise in self-employment and the increasing influx of immigrants to Australia in the coming years.

INNOVATION AND TECHNOLOGY

With a strong emphasis on innovation and technology-driven solutions, Moore highlights that Brighten has made significant investments in continuously developing its end-to-end digital mortgage platform to further enhance service quality.

As part of this strategic commitment, Brighten has custom-built its platform to align with its specific business needs. This approach has enabled Brighten to improve scalability, enhance market responsiveness, gain insights through its analytics platform and enhance business efficiencies through new automation tools.

“Brokers and borrowers value fast turnaround times,” Moore remarks. “Our new platform offers an end-to-end workflow solution, complete with plug-ins for external third parties. It provides underwriters with all the information they need to assess applications effectively and efficiently. This platform, along with an expanded distribution network, will empower us to scale up and originate more loans without requiring significant changes to our credit policy.”

The growth strategy, according to Moore, holds significant potential: “We are six years old, with an excellent performance history, and we are still growing. There are avenues for us to expand without the need for substantial alterations to our business. We aim to access more of our existing market while also targeting new sectors that align with our skill set,” he says.

CONSISTENT ISSUANCE STRATEGY

Brighten has issued securitisation transactions on three occasions and has two funding platforms: its programme for nonresident mortgages, Solaris, and another for its Australian resident offering, called Orion.

Moore says issuance frequency is a function of how fast each book grows but he expects Brighten will complete at least one transaction per year from either programme. He anticipates that the Australian resident book will grow more quickly and therefore be termed out more often, but he also notes the importance of a consistent approach.

Brighten’s first transaction priced in 2021 – a nonresident residential mortgage-backed securities (RMBS) deal from the Solaris programme. The lender issued into Solaris again a year later and issued its debut Australian resident RMBS in December 2022, in the form of Orion Trust 2022-1.

“Many of the accounts in Orion were repeat investors from Solaris, but there were new investors too,” Moore comments. “We have two platforms now and will continue to be a regular issuer in both as we continue to write business in these areas.”

Transaction volume for all deals has been A$350-550million (US$222.9-350.2 million). Moore says Brighten will target at least A$500 million for future transactions. “This is a function of the market and we hope to grow this amount over time,” he continues. “Given where the book is now, we will target A$500 million for future deals – we see this as reflective of a mature business and issuer.”