The feedback on Mortgage Strategy’s lead story last week on major lenders assessing proc fee levels based on quality was mixed.
Our Straw Poll this week was almost evenly split, with 51% giving the idea the thumbs up as opposed to 49% who saw it as a slippery slope to lower proc fees.
Lenders are already providing major distributors with information on how well advisers are packaging cases and the quality of the business that they provide.
This type of reciprocal relationship has been common within other industries for years – think of the relationship that the likes of Tesco has with its food suppliers. Obviously this is also an example of a distributor dictating business terms to its providers, and for the mortgage market those days are long gone.
But a more symbiotic relationship between advisers and lenders that boosts standards could have benefits.
That said, some are concerned that quality assessments could be extended to the performance of loans – such as whether borrowers default. Advisers make every attempt to assess whether borrowers can afford a loan but they don’t have mystical powers to see whether clients’ circumstances will change in the future. That’s all part and parcel of the risk lenders take when giving out loans.
Meanwhile, in London last week the mood was pessimistic at The HSBC Great Housing Debate on the state of the housing market. The majority of those in attendance thought it would be 10 years before we would see another housing boom – a clear sign that the problems will take a long while to unravel.
But when the audience voted on how they would spend a lottery win, 83% said they’d invest in property. Clearly it will be a long time before the UK ceases to be a property-loving nation.