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if they aren’t, they won’t and it becomes a commercial decision.” AMI is committed to fi ghting the
broker’s corner but Sinclair says there’s an element of the “it’s not fair” - he says the dual pricing balance has simply swung the other way. “In the pre-credit crunch days dual pricing worked in brokers’ favour and we didn’t complain,” says Sinclair. “It isn’t now, but in the future the balance won’t necessarily be the same. Exclusive products offered via the broker market are effectively dual pricing and this type of deal is keeping the intermediary market competitive. Brokers shouldn’t be so emotional about it. It’s really about working out the best product for the consumer.” Ray Boulger, senior technical director at John Charcol, says that diversity in products and between lenders is reality and the intermediary friendly and intermediary only lenders which have launched recently, including Aldermore
and Precise Mortgages, will be helpful to concentrate the minds of other lenders. Newcastle’s Marks is also mindful of maintaining good relationships with the broker market.
“Lenders have to be very careful about how they tread with brokers and not damaging those relationships,” he says. “ Intermediaries still have the vast majority of the market and at Newcastle we try wherever possible to avoid dual pricing.
“ I think there’s been a subtle shift of power in the past two years and the balance of power has shifted back to be on a more even footing than it was pre-credit crunch when lenders were competing for business. Brokers understand they need to be more even-handed now that there isn’t the same commercial necessity for lenders to deliver what they have in the past.” Boulger is less concerned about the pricing of products and more concerned about lenders’ behaviour and a seeming
desire to control business volumes by failing borrowers on their credit scores. “Pre-credit crunch, lenders were in a big drive for business and it was the sales directors in charge,” he says. “Now, risk directors are calling the shots and there are a lot of ‘computer says no’ attitudes. The addiction to credit scoring as the god of lending has gone too far.” Boulger admits that credit scoring is a
good refl ection of most people’s ability to pay and can identify bad credit if people have a track record but, he says “it doesn’t give enough detail on those with no credit history or who have made a choice not to take on debt”. There are two kinds of borrowers who
represent good risk says Boulger: the spendthrift who has two or three credit cards and pays each one off every month; and the saver, who saves a regular amount each month but doesn’t choose to spend on a credit card. Nonsensically, the saver gets the worse credit score but arguably they
Decision in Principle to completion.
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