The topic of course is not new – indeed, for many brokers it has been a bone of contention for years – but it does seem to be coming to a head thanks to a major development earlier this month. I’m talking, of course, about retention proc fees.
After months of little talk and even less action, Spanish giant Santander announced this month that it would pay 0.2% proc fee to brokers on retained cases. The news was quickly followed by announcements from Coventry Building Society and TSB who also decided to join the broker-friendly side of the debate. Just today we have seen NatWest commit to paying retention fees.
This is significant progress – and a major victory for the intermediary community – however, the battle is not yet won. One high profile lender has yet to change their stance on the proc fee debate, that lender being Nationwide.
The reason this omission is so noticeable is because this lender has always been committed to the broker market. By refusing to budge on such an important issue for intermediaries Nationwide is at risk of a major PR fail, largely because of one key point – it has not given a valid reason why.
While the stock answer of “We are constantly reviewing our fees but have no plans to make changes” is often rolled out, never is a straightforward reason against paying brokers what they are owed, given. And this is becoming glaringly obvious.
Mortgage brokers are an honourable bunch and I’ve no doubt they will always put the needs of the customer first. As such, if staying with the same lender makes the most sense for a borrower that it what they will recommend, proc fee or no proc fee. But the damage done to the brands’ broker-friendly images could be irreparable.
As a result I think it’s only a matter of time before all major lenders follow the likes of Santander and, trailblazers, Woolwich and Halifax. And rightly so. The process mortgage brokers must go through to determine the best option for remortgage clients is no different to that of a brand new case. Failing to pay for that work is a slap in the face.