Nationwide and Lloyds Banking Group dealt a blow to the broker market last week by making cuts to a number of their proc fees.
Mortgage Strategy understands Nationwide has cut its proc fees for directly authorised brokers by 0.02% from 0.35% to 0.33%, but appointed representatives are not affected.
Nationwide would not confirm the extent of the cut as it considers the information commercially sensitive but says the fees it pays intermediaries are still competitive.
A Nationwide spokeswoman says: “We are confident our proc fees are competitive. We still pay more than some other major lenders.”
Lloyds group has also made changes to proc fees through certain brands.
It is understood that BM Solutions will now pay all brokers around 0.02% less although this will vary between distributors.
Commission has also been changed on the Lloyds TSB Scotland and Scottish Widows brands. Lloyds group would not confirm details, except to say that some distributors have experienced increases and some decreases. Halifax is understood to be largely unaffected.
A Lloyds group spokeswoman says: “We regularly review proc fees to ensure they remain aligned with our business strategy and the market.
We have recently communicated some changes across our brands, effective from April 1, and as a result some fees have reduced but others have increased.”
Ben Thompson, managing director of Legal & General Mortgage Club, says that while on one hand the cuts are a logical tidying up exercise that bring the brands into line with rival firms, it still represents a loss for brokers.
He says: “We’ve always said that when the recovery comes round the most growth is going to come from the intermediary channel, so it’s important lenders keep them financially healthy and motivated in the quiet periods so they can take advantage when the market returns.”