Lenders pile on the pressure

Brokers continued to bear the brunt of the liquidity crisis last week as lenders chopped and changed criteria and fees at short notice.

Scottish Widows Bank, Halifax, BM Solutions and Coventry among others increased rates or cut LTVs to cope with increases in volumes that are pressurising their processing and application departments.

While brokers say they understand lenders’ reasoning, many are frustrated by the lack of notice and question the cuts’ implications for their Treating Customers Fairly obligations.

Amir Kharkowa, proprietor of Options Independent Financial Advisers, says: “Lenders are not making life easy for brokers. They talk about TCF but then pull deals with only hours’ notice, leaving brokers to pick up the pieces.

“I can understand they are trying to price themselves out of the market to maintain service levels but they should have found a way to cope with increas-es in business by now.”

Richard Farr, director of the Association of Mortgage Intermediaries, says he has heard a number of complaints from brokers on the issue.

Farr says: “The TCF guidelines are clear. Brokers are obliged to manage clients’ expectations by telling them about volatile conditions in the market and the prevailing uncertainty when placing deals.”

Ray Boulger, senior technical manager at John Charcol, says: “The past few weeks have seen an increasing number of lenders changing their rates and criteria quickly, putting pressure on brokers to keep up-to-date.

“Brokers need to be vigilant. They have to submit applications quickly and contact lenders to ensure deals are still available.”

Farr says: “Lenders and sourcing systems should be working together to keep product information up-to- date.

“While change at short notice is sometimes unavoidable, retrospective change is unacceptable.”

He adds: “We urge lenders not to overcorrect their products and brokers to continue to do their own product availability research.”