Proc fees will be linked to business quality
Proc fees will ultimately be linked to quality of business, Nigel Stockton has claimed.
The financial services director of Countrywide said he was already working with lenders to develop a model that could calculate quality and relate it to the fee paid.
Stockton said: "I have been pleasantly surprised to see some pragmatic comments from brokers supporting the argument to make proc fees payable so that they reflect the quality of the case.
"This makes sense to me and my views on trail proc fees over the term of a loan are well known.
"Yes, it will be challenging to define quality metrics but I'll be working with my lender partners to get this off the ground for the remainder of the year.
"It will happen - lenders and brokers will support this part of the Mortgage Market Review in its quest to manage risk and promote quality in the industry."
Robert Sinclair, director of the Association of Mortgage Intermediaries, agreed that it was likely the industry would take this route on proc fees.
But he expressed concern that lenders must be able to prove their management information is accurate when measuring quality so brokers weren't short-changed.
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