Brokers back quality linked proc fees
David Hollingworth, associate director at London & Country, said most brokers will be supportive of the idea as long as they fully understand 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 quality there needs to be a lot of discussion on how this will be implemented.”
Matt Fleming-Duffy, mortgage broker at Dorset-based Wessex Investment Management, agreed that linking proc fees to quality was a positive step as some cases are “shockingly packaged”.
He said: “The 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.
“There has to be a degree of flexibility. It makes common sense to send a case to a lender if the only thing outstanding are, let’s say, the solicitor’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.”
Fleming-Duffy did not think that this concept would necessarily spread to intermediary only lenders.
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 broker market. This could just be a project to limit distribution and recoup some cash.”
The reactions came after Lloyds admitted it was looking at how to link proc fees to quality last week at the Mortgage Intelligence conference in Newport, Wales.