NEWS
LENDERS
Proc fees for retention
don’t add up, says AfI
● NATALIE HOLT
Abbey for Intermediaries has ruled
out paying brokers proc fees for re -
tention sales in the near future as it
says the case for such payments does
not stack up financially.
Ricky Okey, managing director of
intermediary distribution for Abbey
and Alliance & Leicester, says that
at the moment it has no intention of
following Halifax in offering commission
for customer retention.
At the lender’s key accounts conference
in Sunningdale last week
Okey told delegates: “Despite our
best endeavours we can’t find a way
of making this work economically,
and we can’t see how Halifax is making
it work either.”
Last month AfI wrote to customers
whose current deals are due to expire
in August waiving early repayment
charges and advising them it may be
cheaper for them to switch lenders.
During the conference Okey confirmed
that such mailings will continue
but said that some changes had
been made in light of complaints
from brokers.
The next letter, which was due this
ARREARS AND POSSESSIONS
4
month, will now be mailed to borrowers
in May and will include a line
about seeking independent financial
advice.
Andrew Montlake,
director at
Coreco Group,
says he does not
begrudge AfI’s
retention decision
and that the
conference was
refreshing in its
honesty.
Montlake says:
“Every lender has
its own way of
doing things. I have always maintained
that it’s up to brokers to stay
on top of their client bank.
“There is room for AfI to look at
the question of proc fees but at least
the lender is engaging with brokers
and there’s no point in us beating
our chests about the way it goes
about its business.”
Speaking to Mortgage Strategy
after the conference, Okey also outlined
AfI’s plans to promote other
financial products alongside mortgage
deals.
Following successful trials with
London & Country and Positive Solutions,
the lender is initially looking
at offering current accounts along
with mortgages, with a view to offering
savings accounts and credit cards
in the future.
Okey says: “It will pay us to do
some different things on mortgages
and I know a number of lenders are
talking about adopting a similar
approach.”
Matthew Wyles, group distribution
director at Nationwide, reveals in the
April issue of Lending Strategy that
Nationwide is now looking at crossselling
more products via brokers.
He says: “Up until now we have
locked brokers into the mortgage
product silo and I’m asking my coll -
eagues why.
“We have a big network of brokers
who know and trust our brand and
who are short of revenue at the
moment so why shouldn’t we take
the opportunity to promote more of
our products?”
Number of borrowers in arrears at
nationalised B&B rockets by 200%
● NATALIE HOLT
The number of borrowers in arrears
over three months at nationalised
lender Bradford & Bingley has shot
up by a massive 198% in the space of
a year.
B&B’s annual results for 2008
show that the number of cases in
arrears by more than three months
hit 16,712 at the end of last year, compared
with 5,610 in 2007.
The value of cases with three
months’ arrears has risen by a staggering
229%, going from £731.2m in
2007 to £2.4bn last year.
The number of cases with either
three missed payments or in possession
equates to 4.6% of the mortgage
book, up from the 1.63% in 2007.
RICKY OKEY
PROC FEE PLAN
NOT FEASIBLE
Arrears levels pushed up the residential
loan impairments from
£54.8m to £467.7m, including a
£173.9m provision for suspected
fraud cases.
During the year 1,503 properties
were repossessed, of which 1,012
were owner-occupied and 491 were
buy-to-let.
However, overall the group made
a pre-tax profit of £134.3m, a rise of
7%, brought about by Treasury support
and the sale of the retail deposit
business to Spanish banking giant
Banco Santander.
Richard Pym, executive chairman
of B&B, says: “2008 was a turbulent
year for British banks, and a very
disappointing year for B&B. Against
a deteriorating economic background
the board took a series of
prudent financial decisions to dispose
of non-core lending portfolios
to raise committed, secured wholesale
funding facilities and to seek
additional capital via a rights issue.”
He adds: “2009 is going to be a further
year of change and the B&B
team will be working hard to protect
the value of our assets and to minimise
the risk to taxpayers.”
Following its results last week the
bank published a 10-year business
plan to run down its mortgage book
from £41.9bn at the end of 2008 to
£36.3bn by the end of 2011.
www.mortgagestrategy.co.uk
NETWORKS
Network Data
blames error for
payment delays
● NATALIE HOLT
Network Data has told its appointed
representatives it is unable to pay
them on a set payment date due to a
“recently identified” problem, with
no word on when commission will
be paid.
An email, seen by Mortgage Strategy
and sent to ARs last week, apologised
for the delay in commission
payments but attributed it to an error
that has impacted on payment dates.
The email reads: “As you are
already aware, we have been working
through the commissions backlog
in as structured way as possible
and been predicting dates that we are
able to release commission to you,
based on the processing time.
“We recently identified a problem
which meant we were unable to meet
the timescales and payment dates
previously promised.”
It continues: “As a result we are
unable to confirm that your payments
will be processed in time for payment
on April 3 and because of the backlog
we are unable to confidently confirm
a new payment date in case we are
unable to process in time.”
In the Network Update for March,
ARs were told of an incentive scheme
promising the top 20 producers for
2009 an exclusive weekend away.
Some brokers have questioned such
a scheme when there are ARs claiming
outstanding commission.
Network Data was unavailable for
comment.
LENDERS
More job cuts on
horizon at RBS
The Royal Bank of Scotland last
week pledged to scrutinise costs
across the organisation as it revealed
that more job cuts are in store.
At the bank’s annual general meeting
on Friday chairman Sir Philip
Hampton said RBS is looking to
make annual cost reductions of
£2.5bn in the next few years.
He says: “In the UK this year so far
we have said that around 2,700 posts
will go. This will not be the end of
the story and more cuts are expected
in the UK and internationally in the
period ahead.”
MORTGAGE STRATEGY April 6, 2009
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