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10/04/2008 - Open Letter to Mortgage Brokers

by Philip Holroyd, Comercial Director, SimplyBiz

I feel compelled to respond to the open letter addressed to mortgage intermediaries by 7 companies who claim to support intermediaries and printed in Money Marketing on the 3 April 2008. In fact if it had been 2 days earlier I might have dismissed it as an April fool!

It is difficult to argue against the actual words of the letter but the sentiment is very much misfounded. I would say to these 7 companies that their first loyalty is to their own customers – the people that pay their fees or support them with business. Perhaps they are only interested in providing support when times are easy? Now is the time to stand up and be counted as an intermediary facing organisation.

Reference is made to TCF and that lenders have not breached this requirement. Don’t forget that intermediaries are also customers by placing the loan in the first place. Also what about TIF – Treating Intermediaries Fairly?

Is it fair to the customer and inter alia the intermediary to withdraw a product without notice? Is it fair to withdraw an offer just before a mortgage is due to complete? Is it fair to credit rescore a case that has been offered with a view to withdrawing the offer? Is it fair to try and cut out a supporting intermediary by discounting your direct product? I believe not.

I would totally concur with encouraging clients to save more with lending institutions but what about the support of the intermediary? Where can they generate revenues to pay their own mortgage? If retail funding is paramount are the institutions prepared to pay commission on these investments?

Over the last few years more than 70% of mortgage business has been placed by the intermediary sector. The sector fully understands that the market is difficult. Surely this is the time that we should all work together for the overall benefit and credibility of the industry.

The letter was published in Money Marketing 10/4/2008 and was also reffered to in an article by Tanya Powley in the same publication, click here to read the piece.

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10/04/2008 - Open Letter to Mortgage Brokers