The National Association of Mortgage Brokers and Advisers (NAMBA) has announced it is to launch an online campaign in a bid to persuade the Department of Trade and Industry (DTI) to review the ruling that brokers are only entitled to a £5 fee if a mortgage deal falls through.
NAMBA has launched its first campaign ‘ despite the fact that the trade body is not due to officially launch until January next year ‘ in response to the DTI’s announcement that Section 155 of the Consumer Credit Act, concerning the retention of broker fees if cases are not completed, is not being reviewed.
The DTI is, however, still in consultation and said that if the issue is flagged up sufficiently by mortgage brokers, then it would reconsider reviewing the section.
Julian Jennings, chief executive of NAMBA, said: ‘We feel that a fair figure for brokers retention would be £150, but it is the principle of the matter.
‘If a broker works 10 hours on a mortgage that falls through and is only allowed £5, then that is only 50 pence an hour. If you asked the DTI if that supported the minimum wage it would have to admit it did not. But as most brokers are self-employed, they are not covered by the minimum wage.’
Commenting on the campaign, Ray Boulger, technical manager of Charcol, said: ‘This is an issue for smaller companies as I estimate that around 30% of all mortgages that have reached the stage of an application form being filled in do not result in a mortgage being issued.’