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Abbey proc fee change is great move, not a scandal

After last week’s announcement that Abbey for Intermediaries is finally making changes to how it pays brokers’ proc fees on its core residential range, there were a number of comments on Mortgage Strategy Online against the move.

From July 2, proc fees will be set at account level with business quality one of the considerations now determining Abbey’s commercial terms.

But is it really much of a shock that a company wants quality business?

We all do it. You deal with the lead providers who give you the best quality and you make a priority the customers who offer you the most.

Santander is actually paying more for better quality business and also pays a full proc fee on the fullbalance of a ported mortgage

So, to the brokers criticising this, don’t even dare to blame someone else for doing the same.

If you don’t like Abbey’s way of working, put your business with Nationwide and Lloyds Banking Group.

But hang on, didn’t they both drop their proc fees for no reason at all a few months ago?

Santander is actually paying more for better quality business and if I remember rightly it also pays a full proc fee on the full balance of a ported mortgage when it does not have to.

Well done Santander. Time to steer towards quality and away from the dead wood in the market who happily defend poor-quality business.
If you provide quality business, you have nothing to worry about.

If you don’t, quite rightly, then see you later. Why should you be paid the same for less quality?

There is no scandal in Abbey’s latest change – just a great move by a forward-thinking lender

Rewarding quality is designed to prevent industry chancers

Although the devil is always in the detail, Abbey’s proc fee move to reward quality is aimed at the chancers in our industry.

I believe Abbey still gets a lot of applications where requested documentation does not match the information inputted, which wastes a lot of time.

If you submit accurate applications, the evidence to prove it in a timely manner and your cases are complete, then not a lot will be different.

Had the Financial Services Authority undertaken individual registration for advisers, as it should have done years ago, this sort of thing might not have been necessary.

I expect Abbey already has a list of names it would like to see the back of and will eventually use it.
Colin

 

Blanket fee is not so useful for those who work in a network

In principle, it makes sense to pay a proc fee commensurate to quality but if you work within a network, some members’ quality will be better than others’.

Lenders should have sufficient management information to reward each business, rather than a blanket fee for each distribution channel.

James Lindon-Travers

 

I won’t give Abbey any work until it improves processing

Abbey needs to get its processing times in order for perfectly packaged cases. Until then, we are not submitting any cases to them.

So I don’t give two hoots about the announcement of this latest move. Its rates are awful at the moment, so no big loss to advisers – a bigger loss to Abbey.

Ancient Wisdom… is a mortgage broker in N3

 

I guess moaners are not sending in good quality business

Abbey’s latest move is not going to have a major effect on many brokers. It won’t affect directly authorised brokers and people who are part of a network, as the proc fee has hardly changed, if at all.

The fee is based on an average, with a tolerance of, I think, 10%. If you send in quality business, you have nothing to worry about.

And it works both ways – if the business is higher quality than average, you can earn a better proc fee.

I don’t know why people are moaning. Send in quality business and you get practically the same – in some cases, better. If your network average is higher, you have the potential to earn a greater fee.

My guess is that those who are moaning are the ones who are not sending in good-quality business.

James

 

Those who damn the change are the glass half empty drinkers

I would like to echo the minority of positive comments that appeared under the story on Mortgage Strategy Online last week about the changes Abbey has made to its proc fees.

Apart from a period 18 months ago, Abbey has treated me fine, with rarely any onerous requirements. Its application system is simple. You enter the correct details and back them up with documentation that corroborates what you have entered. How hard is that?

I suggest all the Abbey bashers have submitted cases that match fast-track on paper but in reality do not. Then they can’t back up the information they have entered. How is that Abbey’s fault?

I, for one, am looking forward to 0.40% not the 0.37% I currently get. I suggest that the people damning this drink the half empty glass.

Richard Scott

 

Why don’t we have anyone to regulate the monstrous FSA?

I was interested to read last week’s magazine, which revealed that the Financial Services Authority has spent £4.5m on recruiting staff in the past 12 months.

A freedom of information request submitted by Mortgage Strategy reveals the regulator has recruited 737 staff in the past 12 months, spending on average about £6,151 for every new recruit.

The figures indicate the rate at which staff are leaving jobs with the regulator.

But the core problem with all the FSA’s spending is that there is no independent body to regulate anything it does.

The FSA is a monster riding roughshod over anyone who dares to try to stand in its way.

The Financial Services and Markets Act, as Hector Sants told the Treasury select committee in March 2011, allows it to do exactly that.
Worse still, any effort by the TSC to change this state of affairs will have to overcome a not inconsiderable hurdle – the government’s declaration that the Financial Conduct Authority, like the FSA before it, will be accountable only to its own board.

What puzzles me is that no one seems to be making any effort to hold the FSA to the provisions of the Statutory Code of Practice for Regulators.

This is even more peculiar since the foreword to that item of legislation was written by MP Pat McFadden, who is now a TSC member.
What is going on? It’s a Kafkaesque nightmare.

Julian Stevens

 

Come back soon: the industry needs more like David Tweedy

I was sad to see the news last week that David Tweedy has stepped down from Platform.

Tweedy has had a massively positive influence on the UK mortgage intermediary sector, arguably as much as any single individual over the past decade.

It is the hope of many of us that he will reappear soon. Our industry needs leaders like Tweedy.

Rob Jupp
Brightstar Financial

 

Customers will have a battle to reclaim money lost on FRP

The Financial Services Authority last week publicly censured Principal Mortgage Services Limited, a broker in Worcester, for failing to give suitable advice in relation to interest-only mortgages.

PMSL recommended its customers take out an interest-only mortgage with an accelerator called the Flexible Repayment Plan.

The FRP was a means by which customers made capital repayments on their interest-only mortgages.

These were collected and held in an account operated by PMSL’s sister company, Flexible Repayment Limited, and transferred to the customer’s lender annually.

But does this mean the Financial Services Compensation Scheme will pay out the monies lost by those who took out the FRP?

I wish them luck but it will be a battle. The FSCS may well say, “The offer said it was interest-only and you signed it”, or “If you had taken out a repayment mortgage it would have cost you more so you have not incurred a loss”.

Tim Griffiths

 

Lending boost for the banks means more funds for the big boys

The government last week unveiled a £100bn package of support to help banks increase lending levels and protect the UK economy.

While this sounds like a good idea, it will add more funds to the big boys looking to lend on vanilla applications.

Some of this money needs to be directed to people who are trapped, such as newly self-employed and adverse credit clients.

The banks accept so-called toxic loans as collateral for the new funds so why not use them to give the needy sectors a shot in the arm?

The only way we will get the market moving is to make mortgage finance accessible to more people.

Name and address supplied

 

Clients need fixed rate deals to help pay off mortgage debts

Credit ratings agency Moody’s last week revealed that a quarter of sub-prime borrowers are unable to refinance their mortgages.

I’d say it is more like 95%. It’s almost impossible to find a lender for someone in a debt repayment plan or individual voluntary arrangement. If rates start rising, people on variable rates will start defaulting.

The banks need to offer fixed rate deals to these clients soon so they can pay off their debt.

Justin Fordham

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Comments
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  • Shane 3rd July 2012 at 4:15 pm

    I agree with AJK. I visited a client last week, gave me an income figure over the phone which when I asked for proof on visit, it came out it was projected income he quoted me, not acceptable, income was 1/5. Went into a Santander branch and the advisor said he would put that down as his income. WE CANT DO THAT

  • seagull 3rd July 2012 at 2:01 pm

    I think you will find AJK is in fact correct, I and other brokers that I have spoken to have had a number of Santander cases where income insufficient yet they have got them through direct. Halifax are as bad, worse even, as they tell clients to hide certain info to get deals through.

  • Jeff Smith 3rd July 2012 at 8:24 am

    @AJk. Santander Advisers have not used fast track for years. All applications need income validating 100%. A lender with a large market share can be a little bit picky on who it lends to can’t it?

  • AJK 29th June 2012 at 10:20 pm

    goalpost changing abbey need to clean up their high street branch advisers who are abusing fast track and pushing through mortgage applications knowing they won’t get audited for income verification. Clearly not a level playing field