Santander’s move on retention proc fees shows it values its brokers. The rest of the lending community must follow suit
It is always good to start the new year on a positive note as January can be a gloomy month, thanks to the excesses of the Christmas season, the dark nights and the cold weather. So I was delighted to find that the biggest news story of the month so far was an extremely positive one.
Santander’s decision to pay a procuration fee to brokers for retention work is huge. The Spanish banking giant is a major player in the mortgage industry so its decision will influence those lenders yet to make the move. Indeed, just days after the news broke we heard that both Coventry Building Society and TSB would be following suit.
For years now, brokers have been battling this issue – and rightly so. A broker must still conduct a fact-find in order to determine that staying with a certain lender is the right option.
It is absurd that some lenders do not feel the need to pay brokers for the work they do in these cases. Credit must go to the likes of the Association of Mortgage Intermediaries – in particular, Robert Sinclair – for their continuing work in ensuring the issue was not brushed under the carpet.
Santander’s move feels as if we are at an important turning point. Indeed, despite all the work of brokers, trade bodies and the trade press in promoting the topic of proc fees before this, momentum had appeared to be lacking, and the issue was still being ignored by a number of lenders. Santander has somewhat spurred it on.
It can be only a matter of time before the likes of RBS and Nationwide follow suit. Neither will want to be the last to cough up and pay brokers appropriately. Expect announcements from both in the not-too-distant future.
Finally, it is important to point out that this is not an issue of broker greed. Indeed, the fees being offered by those lenders that have moved to pay them are not that large. But this is more about appreciation of, and commitment to, the intermediary market. Santander has shown it values its brokers. The rest of the lending community must now do the same.
Ying Tan is managing director of Buy to Let Club