Frank Eve, managing director, Frank Eve Consulting
I\'m surprised that Halifax\'s retention strategy has not caused more comment in the trade press. If other lenders follow Halifax\'s example and start paying brokers commission for retaining borrowers by arranging product switches and further advances, we could see a change in the way the remortgage market works. Halifax will now offer brokers standard commission rates on all product transfers and a minimum commission of 150 on any further advance. Access to back book data will be through Halifax’s online system and brokers will only have to confirm that they have obtained verbal authority from one account holder to access data. The process will be in two stages. The first stage involves the broker obtaining data from Halifax and meeting the borrower. The second involves obtaining online confirmation of acceptance and providing an online application. The commission will then become payable. The data needed will be provided to intermediaries via Halifax’s online system. The lender’s mortgage application screen has been enhanced with a further advance and product transfer button. On pressing the further advance or product transfer Key Facts Illustration button a customer summary screen will be displayed. After confirming that the intermediary has the verbal authority of at least one account holder the system will show relevant customer details. Product transfers can be set for up to three months in advance. The system also provides an indexed valuation of properties which is an estimate based on the Halifax House Price Index and takes into account regional variations in house prices by postcode. The intermediary can then go on to provide product information and a KFI. There is no need for re-keying of data to populate the application form. The system is easy to use and navigation is simple. A product switch and a further advance should be straightforward for brokers and take only minutes to achieve. Although intermediaries will need to be assured that staying with Halifax is the most suitable option for the borrowers in question, this should not be difficult if the Halifax product is well priced and saves the client redemption, valuation and product fees. The process is almost instant which can be an important factor for many borrowers, and it should at least mean that Halifax customers are given the opportunity to stay with their existing lender if they are using intermediaries for their advice. This is the first move by a lender to reduce churn in the mortgage market since Nationwide tried to harmonise its rates for new and existing borrowers, but this time intermediaries have been put at the heart of the process. Halifax should be congratulated for opening up a new relationship with brokers and providing them with a fresh income stream. Other prime lenders will now have to think about how they respond.