Sourcing systems' bill for exclusives shifts to lenders
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Lenders have agreed to bear the costs of displaying their semi-exclusive products on sourcing systems, so networks will no longer be forced to stump up for the bill.
As it stands, when a lender limits its distribution or offers a semi-exclusive product - for example, the same product through a number of networks and clubs - it is these firms that must pay hundreds of pounds every month for the products to appear on sourcing systems.
But from January lenders will pay the costs of displaying such products on the systems.
John Coffield, head of Paradigm Mortgage Services, says lenders are offering a lot of products on a semi-exclusive basis, which has resulted in a hefty bill for distributors.
He says: “We felt, along with other clubs and networks, that we were bearing the brunt of the costs.
“We didn’t think it was fair we were subsidising a lender to show its products. But we have been speaking to the sourcing systems and lenders, and common sense seems to have prevailed.”
Mark Lofthouse, chief executive of Mortgage Brain, says the problem has arisen as a lot of lenders have started to restrict distribution.
For example, a lender may have 50 products which they offer to every broker, but they are increasingly limiting distribution and sourcing systems are uploading the details separately for each individual distributor. This means that instead of uploading 50 deals they could be uploading 500.
Lofthouse says: “It’s only fair and reasonable that lenders, which benefit from working with restricted distribution, should share some of the cost.”
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