4
NEWS
EXCLUSIVE
● NATALIE MARTIN
BROKERS
300 DA firms deserted
the market in Q1 alone
Figures from the Financial Services
Authority reveal that more than 300
directly authorised mortgage companies
threw in the towel and left the
market in Q1 2009.
The total number of DA firms conducting
mortgage broking business
fell from 6,725 in December 2008 to
6,422 in March 2009, down from a
peak of 7,083 in March 2008.
The figures also show that just
over 100 appointed representatives
left the mortgage market in Q1 2009,
leaving 4,699 ARs, down from a market
peak of 5,123 in December 2007 .
One of the biggest falls is seen in
the number of sole traders, with just
1,509 remaining, down from 1,638 in
December 2008 and 1,896 in March
2007.
Sole broker Roy New says he is not
surprised at the number of firms
leaving the market and has been left
with no choice but to throw in the
towel himself.
He says: “I was faced with the
option of either paying my
FSA fees and professional
indemnity insurance for
another year or calling it a
day – I had no choice.
“As of May 31 I will no
longer be regulated.”
Mike Fitzgerald, sales
director at Brentchase Fi -
nancial Services, says he
expects the figures for brokers
leaving the market in
the second quarter of this
year to be much worse.
He says: “It’s unfortunate but the
downturn in the economy is pushing
a lot of brokers out of the market
and they can’t afford to pay their
DUAL PRICING NETWORKS
Banning dual pricing
could kill off proc fees
The Association of Mortgage Intermediaries
has warned that if lenders
were banned from dual pricing it
could backfire and result in proc fees
disappearing.
The trade body says it is working
with the Financial Services Authority
to improve the situation
regarding dual pricing.
Many brokers are angry
about the issue.
Donald Fox, proprietor of
Scotland-based Velocity
Mort gages, says: “We can’t
treat customers fairly under
FSA rules if we are denied
access to the lowest rates.
“Why should we pay fees
to the FSA for it to allow this
to continue?”
But Robert Sinclair, director at the
Association of Mortgage Intermediaries,
says: “We could end up with
what is happening in the investment
market with the Retail Distribution
ROBERT SINCLAIR
BE HONEST WITH
CUSTOMERS
ROY NEW
FSA FEES WERE
THE LAST STRAW
● NATALIE MARTIN ● NATALIE HOLT
Review. Lenders could offer the same
products in all channels but remove
proc fees so brokers would have to
get their fees from clients.
“If big networks do not have the
ability to influence lenders’ pricing
AMI also has difficulty in changing
their behaviour, but that
won’t stop us trying.”
Sinclair says the main
problem is that the high
street banks have a limited
amount of money to lend
and they will have to do a
proportion of this via their
branches.
He adds: “Brokers must
be upfront with clients in
explaining the service they
offer and that there may be better
rates available direct.
“But they should be able to offer
clients advice on fees and rates, guide
them through the process and offer
protection solutions.”
FSA fees. It’s not only brokers who
suffer but also consumers, as they
have restricted choice.
“Honest independent brokers are
getting pushed out and consumers
are being driven to
high street banks. Mortgage
regulation was supposed to
help consumers but it has
ended up pushing brokers
out.”
Robert Sinclair, director
at the Association of Mort-
gage Intermediaries, says
the dip in broker numbers
was to be expected.
He says: “We have known
this was gong to happen for a while.
A lot of companies will have realised
that they can no longer afford to pay
their FSA fees and decided to withdraw
from the market.”
Creditors to pick
liquidator for
PNG next week
Creditors of Premier Network Group
have been contacted by an insolvency
practitioner to appoint a liquidator
for the network.
Last week a letter was sent by
Elwell Watchorn & Saxton LLP to all
known creditors of PNG, which
closed to new business in February.
The letter, seen by Mortgage Strategy,
gives formal notice of a creditors’
meeting to be held at the EWS
head offices in Leicestershire on May
20, once PNG shareholders have
passed a resolution to wind up the
company.
A liquidation committee may also
be formed, comprising between three
and five creditors, to monitor the
progress of the liquidation. Voting
rights will be attributed according
to the sums creditors are owed.
PNG appointed representatives
who cannot attend the meeting can
nominate someone to attend on their
behalf.
www.mortgagestrategy.co.uk
NETWORKS
ARs left hanging
as Network Data
transfer deal fails
● NATALIE HOLT
Appointed representatives of Network
Data Limited and Mortgage
Broking Services Limited were once
again left in limbo last week as att -
empts to transfer them to another
network failed.
Network Data Holdings, the parent
group of both networks, was temporarily
suspended from the Alternative
Investment Market last week
following the collapse of discussions
with Lighthouse Group.
A London Stock Exchange announcement
reveals that Network
Data’s board requested a temporary
suspension of trading in light of the
uncertainty surrounding the firm.
It has also emerged that the Lighthouse
deal was blocked by Network
Data’s banker HBOS as the bank
called for an alternative bidder be -
fore any transfer could go ahead.
The LSE statement says: “The
board confirms that an offer had
been made by Lighthouse Group and
accepted by the group for the mortgage
broking businesses. But the
offer required approval from the
group’s bankers to proceed to completion
and this was not provided in
time. The offer has been withdrawn.”
David Hickey, executive chairman
of Lighthouse, says: “Our board re -
grets that the arr angements to conclude
a deal were not implemented.”
MBSL is still showing on the
Financial Services Authority register
as being authorised, despite the
turmoil surrounding Network Data.
Dino Savva, principal of Hertfordshire-based
MortgageCare, is an
AR with MBSL. He has written to
Richard Griffiths, chief executive of
Network Data Holdings, to ask why
£7,969 in commission has not been
paid. He has also written to the FSA
asking it to investigate the matter.
Savva says: “Lenders are still making
payments to MBSL because they
are not being told any different. I
rang the FSA for assistance and was
told it was a contractual issue.”
The FSA and Lloyds Banking
Group both declined to comment.
As Mortgage Strategy went to
press there were rumours that the
administrator acting on behalf of
Network Surveyors, a subsidiary of
Network Data Holdings, may have
approached a major surveying group
for a rescue bid.
MORTGAGE STRATEGY May 11, 2009
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