Lloyds Banking Group will begin paying proc fees based on case quality from next month, Mortgage Strategy can reveal.
The lender will base payments on the applications to completions ratio, arrears performance and what measures a firm has put in place to prevent fraud.
Only Lloyds’ key accounts will be paid using the new quality-based system.
A spokeswoman says: ”Having conducted an extensive review into our proc fee structure and the wider market, we have had discussions with key accounts and will now be linking our proc fee payment structure to the quality of business supplied. Linking metrics that will improve the quality of the business is clearly a good thing.
”We are committed to writing mortgage business that is good quality and to offering borrowers the right mortgage for their needs, and these changes support our commitment to working closely with our key account partners and customers to achieve this.”
Mortgage Strategy first revealed the lender was considering linking proc fees to quality in September 2012 and then, in September 2013, we revealed the bank had decided to press ahead with the plans.
The move follows that of rival Abbey for Intermediaries, now Santander for Intermediaries, which switched to a quality-based payment system in July last year.
Santander measures quality against a number of key metrics, including case packaging and the conversion rate of applications to offer.