News Review
Brokers begin to back quality linked proc fees By Samantha Cordon
Brokers are coming round to the idea of quality linked proc fees but say lenders must make them transparent. David Hollingworth, as-
sociate director at London & Country, said most brokers will be supportive of the idea as long as they fully under- stand the measures that will affect their payment. He said: “Brokers need
to be able to clearly see how quality will be assessed and the measures must be within their control.” But Hollingworth had
concerns that certain types of business may be viewed more harshly than others. A brokerage that specialises in first-time buyers for instance could be adversely affected. He added: “For me, that
is where the debate lies. If brokers are marked down for high loan to value cases then that would not be fair so while there is an obvious argument for improved qual- ity there needs to be a lot of discussion on how this will be implemented.” Matt Fleming-Duffy, mort-
gage broker at Dorset-based Wessex Investment Manage-
He said: “Intermediary
only lenders would not want to bite the hand that feeds them by sending cases back, delaying underwriting and spoiling relationships. High street banks don’t think the same way – they have a more short-sighted view of the bro- ker market. Tis could just be a project to limit distribution and recoup some cash.”
ment, agreed that linking
proc fees to quality was a positive step as some cases are “shockingly packaged”. He said: “Te question is
how will it be patrolled and monitored. If cases are being sent back for something very small then I think you have problems. Tere has to be a degree of flexibility. It’s com- mon sense to send a case to a lender if the only thing out- standing is, let’s say, the solici- tor’s details, but some lenders may decide that you have not hit the required standard of quality or even post the case back – even if you submit a letter stating the client is still choosing a solicitor.” And Fleming-Duffy did not
think that this concept would necessarily spread to interme- diary only lenders.
“Intermediary only lenders would not want to bite the hand that feeds them by sending cases back, delaying underwriting and spoiling relationships”
nancial services director at Countrywide,
that as the factors
And Nigel Stockton, fi- said
long as the structure was fair and transparent and brokers could influence
then the idea was reasonable. Te reactions came aſter
Lloyds Banking Group admit- ted it was looking at how to link proc fees to quality at the Mortgage Intelligence confer- ence in Newport, Wales. Peter Curran, LBG head
of intermediary distribution, admitted the bank was look- ing into the concept of how to reward and recognise brokers who submit good business. He said: “It seems eminent-
ly sensible to recognise qual- ity - but how you do it is the part we are working on.” In June Mortgage Intro-
ducer revealed that Abbey for Intermediaries would reward “good” quality cases with 39bps proc fee, medium qual- ity 37bps and “poor” quality cases 35bps. Charles Haresnape, man-
aging director of residential mortgages at Aldermore, said he remained dubious about the concept. He said: “Aldermore currently has no intentions
of changing its
proc fee structure. I think it is extremely difficult to have relevant measures to monitor quality of packaging that are entirely within the broker’s control.”
6 MORTGAGE INTRODUCER OCTOBER 2012
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