Decision-in-principle to application ratios will not form part of any changes Lloyds Banking Group makes to its procuration fee structure.
Lloyds director of strategic partnerships Peter Curran says a final decision on whether to pay proc-fees based on quality has yet to be made. But he has ruled out using DIP levels as a metric whilst suggesting that an application to conversion ratio could be used in calculations.
In September, Mortgage Strategy revealed Lloyds was considering linking its proc fees to the quality of business submitted.
Curran says: “The only metric which would be off the table would be DIP to application. We have decided that this is not one which we would take into account since it is not a great indicator and would not be appropriate.”
“There are a series of metric and discussing points that we can look at. There is an argument to be made for the application to conversion ratio as it is in everyone’s interest to have a more effective and efficient system.”
Abbey for Intermediaries announced in June that it was going to take quality into consideration when paying proc fees.
London and Country head of communications David Hollingworth says: “Dip to app does not really measure anything. It could put people off using decisions in principle because they would not want them to have a negative impact. Whenever there is talk of linking proc fee to anything, it can potentially lead to unintended consequences.”
Perception Finance managing director David Sheppard says: “Brokers need to have some reassurances that, if we are going to be tested on our quality, the lenders need to do so as well. Ultimately, we do see some quite poor levels of service, from time to time.
“To put the onus on us for quality has to be reciprocated. Lenders need to set service standards they can stick to. It is largely a processing thing. Whilst we appreciate the levels of business coming in from one moment to the next are going to affect the speed of processing, it is an important consideration.”