Brokers to get proc fee lifeline

Struggling brokers have been given a lifeline from outsourcing firm Connect Mortgage Group.

Connect is offering a to pay proc fees to its 460 members when a mortgage is offered rather than after completion.

With the growing concern over proc fees and if they will be paid, this is a much-needed guarantee.

Tony Webster, CEO of Connect, says: “The credit crunch is affecting everyone in the industry and some brokers are finding cash flow tight. Allowing our brokers to receive proc fees some six to eight weeks early will help them significantly.”

Webster believes the only way to restore confidence is to put one’s money where one’s mouth is and give brokers the option to take their proc fees at offer stage.

He says: “We’ve always paid out proc fees earlier than most. We used to pay on exchange of contracts for purchases and on the day of completion for remortgages. But once lenders started paying one to two days after completion, our facility only added value by a couple of weeks which wasn’t a big enough advantage.

“So we asked each of our members whether they’d prefer to get paid on offer and around half of them said yes.”

The new proc fee service will be launch in the next few weeks.