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Major lenders rule out proc fees for retention deals

London, UK - July 2, 2011: Model figurine of a businesman standing at Super Tax on the board game monopoly Model figurine of a businesman standing at Super Tax on the board game monopoly with hotel on Mayfair and houses on Park Lane and Dice in the background

Half of the top ten largest lenders have no plans to bring in broker procuration fees for retention business.

Of the top ten largest lenders by CML data, Santander, Nationwide, RBS, HSBC and Virgin Money all say they have no plans to bring in retention proc fees.

Lloyds, Barclays, Cambridge Building Society and Clydesdale already pay some form of proc fee for retention business. However, Lloyds is the only lender that pays a full proc fee.

Skipton, the 11th-largest lender, announced this week it was running a proc fee pilot, while Mortgage Strategy revealed that Yorkshire and Coventry building societies are considering paying for retention business.

A Santander spokeswoman confirmed the lender is not considering paying for retention business but added: “As a well-run scale challenger bank, Santander constantly reviews its product offerings and propositions to help it continue to meet its purpose of helping people and businesses prosper.

“We want to grow our mortgage market share in 2016, and so are trialling various initiatives across the mortgage division.

“Depending on the success of these pilots, we may roll out some of the initiatives more widely, if we believe they can help our customers, our intermediary partners and Santander.”

A Nationwide spokeswoman says: “We have procuration fees constantly under review, but have no plans to change our current model at this time.”

RBS head of mortgages Lloyd Cochrane says: “RBS and NatWest are committed to meeting customer needs and the needs of the advisers that help them with their mortgage.

“At this time we are not planning on offering a procuration fee for business that is retained with us but we constantly review our position on this and will continue to do so going forward.”

An HSBC spokesman says: “This is not something we have plans to introduce.”

A Virgin Money spokesman says: “The position is we do keep it under review but we have nothing further to add on it at present.”


Yorkshire mulls proc fees for retention business

Yorkshire Building Society is reviewing whether to reintroduce procuration fees for retention business. The lender, which stopped paying the fees in 2009, will make a formal decision about restarting in the next three months. A Yorkshire Building Society spokeswoman says: “It is something we are reviewing at the minute, we are looking into the possibility. […]


Skipton to pay proc fees in retention pilot

Skipton Building Society is set to launch a mortgage retention pilot and will be paying a procuration fee. The six-month pilot will be with Connells and London & Country. The lender will not be paying a full proc fee for retention business, but it is not disclosing what this will be as it could change […]


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Lenders’ payment of proc fees is notoriously inconsistent. With brokers aggrieved that their post-MMR workload is going unrewarded, is it time for an overhaul of the proc fee system? The path of lenders’ procuration fees during the past decade tells the story of the mortgage broker industry. From the boom to the bust to the […]


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  • Carl McGovern 4th May 2016 at 2:45 pm

    One of the lenders has decided to allow the broker to access a clients existing Mortgage and gives the client/broker a choice of products. Given that for compliance reasons, we have as much work to do this as we have for a Re Mortgage, where is the sense? Either cut us out completely, or pay us, but please don’t take us for mugs and expect us to do you work and be culpable for the advice for free.

  • Chris Hulme 27th April 2016 at 10:38 pm

    Now that the choice of lender no longer boils down to rate and focusses more on criteria and how easy a lender is to deal with for the client, brokers will (and I’m sure do) have discussion with clients on which lender will help the broker assist the client in the future and whether it is the lender that meets part of the broker cost to offer the retention service or the client covers the broker cost could sway some clients to ask the broker to consider lenders that support the client and broker in equal measure.
    It’s difference between hair and fur on choosing a lender these days and with lenders such as those paying retention fees very much up there and in the mix, the half of lenders not contributing to the broker and client relationship can sit back and watch their market share dwindle.

  • Steven Balmer 27th April 2016 at 1:01 pm

    Well said Stuart, brokers are like elephants though and I will ensure ongoing service levels as a consideration when placing business in the first place. All lenders have said is we will not pay until we feel it is noticed and having a negative effect on retention levels so may this happen soon.

  • Stuart Gregory 27th April 2016 at 12:21 pm

    So, basically, lenders are not only happy to pay proc fees at 2008 rates (even though broker workloads have increased) but they also don’t value the work brokers put into retaining clients for them.

    Lenders are acting like a cartel & holding down broker remuneration – time for the AMI to step forward I feel.

    Empty rhetoric about being ‘intermediary friendly’ from lenders in many cases.

    They may not like the percentage of the market brokers have for advice and would rather we didn’t exist in many cases, but they are playing a risky game when they can’t offer anywhere near the same level of service brokers can.

    • Tom O'Connor 27th April 2016 at 12:51 pm

      Hi Stuart,
      I think what you may be seeing is some 2008 thinking here, ie pre-MMR, pre-EUMCD. Retention was never on the agenda for many intermediary lenders then and it is difficult to see some leopards changing their spots.
      Let’s face it some of the people running intermediary arms have never heard of retention; they are used to the world of churn. But it is a very conflicted and divisive subject. Personally, I pity the customer in all of this. They want certainty.


    • Hugo Feeproc 27th April 2016 at 1:10 pm

      Well said Stuart. Some lenders want to have their cake and eat it. Parasites!
      Halifax get over 50% of my business and I let BDM’s know this. I can always find a reason to recommend them.


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