Many mortgage networks are not portraying their membership sizes accurately, according to Alliance & Leicester head of intermediary mortgages Mehrdad Yousefi.
Yousefi says that with auth-orised representatives yet to make up their minds on whe-ther they will join a network or become directly authorised, there is a danger of networks not being able to validate their business models and recruitment numbers.
A&L has been speaking to several networks in the lead-up to M-Day. Yousefi says in a mortgage environment where a slowdown is being witnessed, the lending community is at further risk because of networks which are unable to survive if they have to amend their recruitment figures after October 31. He says this poses a risk for lenders and networks to prosper in a regulatory regime.
FSA figures show that up to September, 129 applications have been made to become networks and 79 have received MTA or VOP letters. Yousefi says: “All of these are talking about similar recruiting numbers. There has to be a shake-up somewhere along the line.”
First4Brokers mortgage network managing director Charles Gooding says: “I am sure some networks are not achieving their figures to date but this should not have been unexpected.”
Yousefi says: “The networks have recruitment aspirations but do they have a plan B to be able to survive? I do not think everyone has done their sums.”
Mortgage Brief, p59