The first was sent to Mortgage Solutions from Paul Smulovitch on the topic of dual pricing.
He said: “It’s not a secret that the majority of lending in the UK is generated through intermediaries. Lenders operating through a branch network are no exception to this either, so why do they continue to bite the proverbial hand that feeds them?
“Lenders that dual price alienate brokers and cause ill feelings. In an industry where it’s all about treating customers fairly, a broker is meant to find the ‘best’ solution to a client’s needs. Hopefully, most brokers do treat customers fairly and don’t choose a lender at a higher rate because of policies such as dual pricing, but if there were comparative deals, you would recommend the lender that worked with and not against brokers.
“Today, however, I have encountered a new issue. In the current economic climate, clients with savings are looking to reduce their debts to manage spiralling mortgage costs. We have many clients wanting to pay lump sums off their mortgage at the same time as looking at remortgaging or product transfers.”
Better terms for borrowers when going direct
He added: “While many lenders are now understanding the cost of acquiring a client and therefore offer reasonable rates to retain them, some of their systems lack the finesse of being able to reduce the lending figure that they wish to take onto the new deal.
“Those wanting to pay more than the standard 10 per cent overpayment most lenders allow see the opportunity of considering a product transfer. Some lenders permit unlimited overpayments within the last month of a fixed period, others allow brokers to key a lower transfer amount than the actual debt, while some have a window post-transfer of unlimited overpayments without penalty.
“However, some say the only way the client can pay more than 10 per cent without penalty and secure a rate today is to go direct.
“One lender offers the option of a borrower going on to the standard variable rate and making unlimited overpayments during this period, before locking into a new deal.”
Smulovitch continued: “In an economy of rising rates, this is not perhaps the best option, so the only solution is for the client to decline the broker’s efforts, research and time and go direct to the lender instead, thus cutting out the broker.
“As a broker who is fortunate enough to have loyal clients, they expressly asked the lender in question if they could still do this through me but was told it was not possible.
“To my shock, I verified this with our excellent business development manager (BDM) to find that this was true.
“With Intermediary Mortgage Lenders Association (IMLA) predicting a vast majority of mortgages coming through the intermediary channel by the end of 2024, lenders must wake up and understand the importance of not just treating customers fairly, but treating brokers fairly too.”
There must be a better way to manage withdrawals
The second came in from Danielle Panteli, in response to the story: Advisers urge lenders to agree minimum 24-hour withdrawal notice period
She said: “I do feel there must be a way this could be managed much better than it has been. As one example, today I received a lender’s withdrawal notice at 3pm while I was in a meeting, advising that applications needed to be in by 5pm.
“How is that an acceptable amount of time? How do you explain to clients: ‘I was in a meeting and the lender gave us two hours’ notice which I’ve missed’? I understand lenders are in the game to make money, but there must be a better way to manage this. Those in pricing are surely keeping an eye on the market, and could make these calls with more notice? I find it hard to believe some of these large financial institutions would make massive losses by giving 24 hours notice as opposed to two hours. It is clearly not helping lenders’ volume levels either, with the tech crashes and so on.”
Stuart Owen added to the discussion, saying: “You just have to look at one lender’s current product guide which was dated 26 May 13:32. They announced rate changes on 1 June 2pm, with all applications to be in by 10pm that night.
“There were at least four working days between their product guide being changed and the withdrawals. They knew they were going to change, but left it with just a few hours to get those final applications in. There were similar timings on previous withdrawals.”
The comments here are from our readers and do not necessarily reflect the views of Mortgage Solutions and Specialist Lending Solutions.