Proc fees to fall as technology improves
That is the view of Rooftop Mortgages sales and marketing director, Alison Beech, who said because brokers spend less time on processing an application, the fee should be reflective of the work they do.
Beech said: “All the furore surrounding lenders cutting proc fees is clouding the real remuneration issue: lenders paying appropriately for intermediary processing time. Like it or not, better technology these days means generally less time is spent processing.
“Before the accusations of undervaluing intermediaries start flying, let me make it perfectly clear that this is not about doubting the value of packagers and brokers – it is purely a case of economics. Intermediaries should be paid a proc fee commensurate with the amount of work that is asked of them.”
Other lenders have said, while they are monitoring the situation, they have no plans to reduce their proc fees.
Tony Capon, head of sales at Salt, said: “Long-term, we are keeping a watchful eye on the market. You can never say never, but we’ve got no immediate plans to change proc fees.”
Colin Dale, head of lending at Skipton Building Society, said: “Until all lenders are using the same levels of technology, it would be very difficult to validate lower fees, especially if you consider that the fee levels are dictated more by market forces than by anything from the world of IT.”
Brian Poole, mortgage adviser at A M Ruthven & Associates, said: “Intermediaries do all the work to source the client so if the lender thinks the procuration fee is just for processing, it is on another planet. A mortgage application involves finding the client as well as two or three home visits at least, so it is more than just getting all the paperwork in order to send to them.”