In an update to its members, the AMI says it has talked with the Council of Mortgage Lenders, the Intermediary Mortgage Lenders’ Association and the FSA over the issue and is considering OFT involvement.
Senior policy analyst Andrew Strange says: “We are also talking with the biggest len-ders to highlight the importance of a strong and supported intermediary sector.”
The AMI has come under fire from brokers, who say it has failed to defend the intermediary market over lenders’ actions. But Strange says much of its lobbying work is done out of sight and if every issue were raised publicly, its lobbying influence would be adversely affected.
He says the AMI does not understand why a lender chooses to launch a range of products undercutting – and undermining – its own intermediary product range.
He says: “This is counter-intuitive. The most obvious reason to use an intermediary has to be cost. Distribution through intermediaries is incredibly economic. Compared with branch-based lending, intermediaries cost less, tie up less capital, create an incredibly flexible resource and are only paid on successful completion. A cumbersome branch network of expensive branches and staff is a fixed and expensive overhead.”
The AMI says it hopes to issue guidance to members and propose a possible market solution within days.
Strange says: “This follows FSA meetings to discuss solutions put forward by the AMI. It is possible that the solutions themselves, combined with the AMI’s lobbying, will also succeed in tackling the issues with lenders and result in improved market conditions anyway.”