Did Mortgage Intelligence's decision to offer free membership to its network until October 31 shake the mortgage market to its foundations? Given some of the press coverage it received you could be forgiven for thinking so.
As we reported last week, Mortgage Next and Pink Home Loans were quick to follow suit.
Meanwhile, other networks have not been slow to point out the superfluity of it all. Whitechurch Mortgage Network, Berkley Berry Birch and many more have all been doing this for quite some time.
“Little innocent Whitechurch trudges along and due to it's usual stance of 'all we do is compliance (what else)' finds it odd that there is this sudden debate about charges for networks and special offers,” says Whitechuch managing director Ian McIver.
“We have had a special offer on for the past few weeks whereby anyone agreeing to join either network or any of the compliance services we offer before the end of, say, June 2004, pays no fees at all until January 2005,” he adds.
But it's worth pointing out that the strong press coverage Mortgage Intelligence received (MI managing director Sally Laker explains the reasoning behind the decision on page 28 of this week's Mortgage Strategy) is down to the high regard in which both MI and its managing director are held, not just by their peers but across the industry as a whole.
And in defence of Mortgage Intelligence and the others that have followed its lead there is nothing wrong with a launch offer – as McIver points out everyone does that. Indeed, he even admits that for Whitechurch its 'no fee till 2005' offer helped cement a number of enquiries to the network in place.
“But what amazes me,” he adds, “is that the current spate of offers surrounds the cheek of charging prior to October.”
McIver says Whitechurch has always said that no fees are payable to it until October for any service contract.
“Our message has always been to just join now and get the induction out of the way,” he says. “It does take a little time, and there will be one hell of a bottleneck if everyone leaves it until the last minute.”
McIver has a solid point. Sure, more incentives and discounts may appear but at what cost? Remember, each of the networks will need time to check the credentials of each prospective AR – a process which will take something between six to eight weeks, depending on internal infrastructure.
So, while in theory it's possible to argue for the end of August or even mid-September as cut-off points for application, if every prospective AR leaves it to the last minute, it's doubtful whether the networks will be able to cope with the administrative burden – and you could end up not being able to trade.
Michael Ward, managing director of enable, hammers home the point in our letters pages this week, starting on page 19.
“If you plan to become an AR, look for a proper AR model which takes the compliance risk off your shoulders,” he says. “Look to the quality of the management, assess the depth of financial backing, look at the preparedness of the offering, ask some difficult questions and apply now, before it's too late!”