The specialist lender has replaced the flat arrangement fee of £399 with a fee of 1% of the total loan, making it more expensive than competitors like Mortgage Express which has set its fee at £375.
But BM Solutions' director of mortgages Michael Bolton says this move was essential. He says: “If we hadn't slowed down our lending in this sector we would have done over £10bn of self-cert by the end of the year.
“Putting the brakes on now means we put a sensible limit on our market share. If there were more credible competitors in the market, this wouldn't be such a problem.”
BM Solutions says the change is a short-term measure to get business back to where it wants it and says it will return to the market with a bang within months.
Square Mile Mortgage Finance managing director Andy Wilgoss says: “If this is short-term, we can live with it. I don't think it will affect BMS's relationship with the brokers who are used to dealing with it.”
He adds: “It will be interesting to see whether this becomes part of BMS's strategy when it needs to control volumes by turning the tap on and off.”
Tim Sturley, head of business development at Mortgage Express, says: “By changing the arrangement fee in this way, BM Solutions seems to be sending a clear message to the market which will probably reduce the volume of its self-cert business substantially.
“Mortgage Express remains committed to this market and will continue to offer competitive fees.”