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Calls to shame lenders that renege on retention proc fee promise

Earlier this year, lenders announced that they would pay retention proc fees to brokers before the end of the year. But those that have confirmed when this will happen are few and far between and brokers are growing increasingly frustrated…

After all the big announcements at the start of the year from lenders about paying proc fees on retention products, even Nationwide and NatWest had to be brought kicking and screaming to the table. Why have some of these lenders still not actioned this?

I have had to advise three clients this month, who all happen to be TMW and Nationwide customers, that their best option is to return to the lender, which means I have lost out on yet more income because of the lenders’ policies of offering best rate and a £100 incentive.

I am not interested in some fancy electronic switching process that lenders think they and we need. Woolwich has a paper-based system that has worked well for more than five years so, if it can do it, come on Nationwide, NatWest and the others that are still paying lip service to this – so can you!!

As brokers, we need to show up the lenders that are dragging their feet for what they are, until they get on with implementing the system and paying us for the advice we give.

Simon Ward

PRA chief exec comes under fire for ‘spirit of regulation’ comment…

Last week, the PRA chief executive warned that 35-year mortgages might not comply with “the spirit of regulation” because lenders might focus on the first five years of the product and then abandon it. But the industry strongly disagreed…

Surely longer-term mortgages were a predictable outcome of the MMR.

That was the whole essence of looking at younger borrowers as being able to ‘afford’ more (and older borrowers, less) in relation to the period they had left in work.

We do, however, see affordability models pushing clients into longer terms than their chosen comfortable budgets would indicate… and that is not an ideal consumer outcome.

Chris Hulme

…and poor grasp of ‘the real world’, where short terms are bad news…

Maybe I see the world differently from most. A longer term minimises monthly payments on a repayment mortgage (thus enabling borrowers to cope with cashflow better during times of hardship) but maintains the ability to overpay (offered by almost all lenders) to reduce the term or interest payable as cashflow allows.

Alternatively, commit to shorter terms and higher payments and stand a greater chance of being unable to pay when life throws a curveball at you, with the resulting bad credit and subsequent consequences.

Many shorter-term, interest-only loans are now ending, with the changes in regulation basically making the borrowers homeless as lenders show little flexibility in extending.

I expect that those borrowers now wish they’d taken a longer term from the outset. Add to that the fact that the term on a mortgage is largely hypothetical because most people move home multiple times, and shorter terms just don’t make sense.

Sorry, Sam. Your maths may be correct but your “real world” radar needs adjusting.

Chris Batten

…plus borrowers always have good reasons for seeking longer terms

This is total nonsense. I do not think our consumers would opt for a longer term unless there was a reason and, as a broker, I always explain in detail what the implications are. There are usually good reasons for requesting a longer term.

As for the lenders, most products out there allow for overpayments, which enable borrowers to reduce the interest and term and therefore gain better control of their finances.

The PRA needs to join the real world – assuming we still need a housing market!

Karen Guler



Former TSB head of property risk joins Gatehouse

Shariah compliant bank Gatehouse has appointed former TSB head of property risk Paul Stockwell as chief commercial officer. In May, Mortgage Strategy revealed that Gatehouse Bank will launch into the mainstream residential and buy-to-let mortgage market later this year. Prior to TSB, Stockwell worked for Aldermore Bank where he was responsible for all property development, […]

Two-year mortgage rates lowest since records began: Moneyfacts

Rates on average two-year fixed and variable mortgages have fallen to their lowest point since Moneyfacts records began nearly three decades ago. Moneyfacts says this defies economic conditions encouraging the rates to rise. The average two-year fixed rate is now 2.26 per cent, while the average tracker is now 1.82 per cent. Moneyfacts finance expert […]


Gatehouse makes clutch of leadership changes

Gatehouse Bank has made a batch of leadership changes, including deputy chairman Lord Carrington and board director Mohamad Al-Tahawy resigning. The shariah-compliant bank has also hired former Barclays managing director of mortgages Andrew Gray as non-executive director Chairman Fahed Boodai has resumed his role, having been interim chief executive while handing over to current incumbent […]


FCA defends spending over £60k on new logo

The FCA has defended its decision to spend more than £60,000 upgrading its logo. The regulator employed advertising consultants Saatchi and Saatchi to redesign its branding last year, spending a total of £66,000. Mortgage Strategy revealed earlier this year that the FCA paid Saatchi and Saatchi £57,600 to audit its brand and design the new […]


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