Richard Angliss, managing director of Home Buyer Systems, says: “Our latest sourcing index, which shows the cost to customers of broker products compared with equivalent direct to lender products, confirms that direct products are currently up to more than £8000.00 cheaper for borrowers over the first two years – a saving of £350 a month.
“In addition, for remortgage and second time buyers, there are currently no deals via brokers for more than 85% LTV, whereas higher LTVs are available direct to lender. Our technology enables brokers to research and recommend direct to lender products, and then they have the option to charge the borrower a fee for their services and ensures they still get to sell related insurance products.
“Feedback from our users shows that mortgage customers are aware through using mortgage comparison websites, such as Moneysupermarket.com and the FSA’s Money Made Clear, of what is available directly from the lender but still seek the advice of a mortgage broker.
“From their research they find out that the broker products are more expensive when they visit a broker but they are often happy to pay a fee for administration services regarding the direct mortgage applications.”
It says in its experience many lenders are refusing to accept the applications via a broker. As these applications do not cost the lender a procuration fee, it seems illogical for them to shut out intermediaries from the process .
Angliss adds: “We would even go so far as to say that lenders are in danger of contravening the FSA’s principle No 6 “A firm must pay due regard to the interests of its customers and treat them fairly.”
“We hope that, by raising this debate within the industry, lenders will be encouraged to drop this restrictive practice and instead give the broker community the support it deserves through the current difficult trading conditions.”