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Industry in renewed calls for higher proc fees

Industry experts have renewed calls for lenders to pay higher procuration fees due to the additional work involved in processing cases post-MMR.

Taking part in a panel session at the Financial Services Expo in London today, experts suggested lenders should recognise the work brokers do by paying more commission.

Mortgages for Business managing director David Whittaker says: “In the post-MMR environment brokers are taking on a bigger workload and lenders are now more dependent on the work of brokers so they need to invest more in that channel. Lenders must recognise the broker role and increase their proc fees.”

SimplyBiz Mortgages chief executive Martin Reynolds says: “we saw proc fees move down last year but I would certainly agree that in the mainstream residential space, lenders need to look to raise proc fees and not just get to where they were but perhaps go higher.”

Speaking at the Association of Short Term Lenders’ annual conference last week, Association of Mortgage Intermediaries chief executive Robert Sinclair said he expected there to be a proc fee war before the end of the year as lenders struggle to hit their year-end targets.

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  • Julian Stevens 25th September 2014 at 11:02 am

    I’m not a mortgage broker and this idea may already have been mooted and dismissed elsewhere, but why not allow a Customer-agreed Adviser Charge to be added to the loan thereby, as far as payment for the services of the broker are concerned, removing the lender from the equation?

  • Corby Macdonald 24th September 2014 at 2:07 pm

    I agree proc fees should be higher, but, this should not cloud a brokers judgement when advising their clients. We have to ensure that we are seen to do the best job for them, basing advice on their individual circumstances and not on who may offer more money for using their products. (I am not saying people would, but, lets remove temptation) It would be nice to see lenders, reward the hard work that brokers do on their behalf to get them business with proc levels that reflect these efforts! And lets not forget, in the majority of cases, not all of the proc fee goes to the actual broker, a good proportion goes to network fees etc. So whilst the individual broker workload may have increased they may not be getting all of the reward!