View more on these topics

Bolton backlash in rates for fees row

Sub-prime lender BM Solutions&#39 head of lending Michael Bolton has been criticised by rivals after accusing them of charging borrowers excessive interest rates to pay brokers higher procuration fees.

He provoked the wrath of rivals by hitting out at the practices of “traditional sub-prime lenders” at the Efficiency & Excellence in Mortgage Processing conference in London last week.

Bolton attacks the mortgage code for allowing some lenders to pay fees to intermediaries of up to 8 per cent of the loan and then hit borrowers with an increase to rates of around 5 per cent when the discount periods end.

He also warns brokers of the dangers of relying on this income which may be lost when Treasury regulation is introduced in 2004.

Platform Home Loans chief executive David Tweedie, who took part in the debate, disagrees with Bolton&#39s claims, saying the slightly higher rates are due to pricing for risk. He admits that intermediaries may get minimally better procuration fees for the additional work involved in processing non-conforming cases.

IF Online sales manager Colin Preston says he has never encountered broker fees of up to 8 per cent and interest rates are not directly related to funding of intermediaries.

At the conference, Bolton claimed the entrance of brand names such as BM Solutions into sub-prime would encourage more intermediaries to get involved in the sector.

Bolton says: “Under the existing mortgage code, there is no requirement for the full acquisition fee to be revealed. Lenders are already in dialogue with the FSA about this issue. Typically, borrowers going to sub-prime lenders are in a distressed situation and regulation has to ensure that they are in an informed position.”


Threat to trackers&#39 stakeholder links

Tracker funds as an external fund link on stakeholder could be under threat if the charges on their underlying investments exceed 1 per cent at any time, warns the Investment Management Association.The alert comes as the Department for Work and Pensions refused to budge on letting firms charge more than 1/365ths of 1 per cent […]

Dunstan Thomas has eye on pensions

IT services provider Dunstan Thomas is planning to focus on the financial services market and the pension sector in particular.The company says concentrating on financial services rather then general markets builds on the experience it has gained from providing services to a number of financial companies, including Friends Provident, Zurich, PPML, Winterthur and James Hay […]

Village people see home values rise

One-third of first-time buyers would have reconsidered the location of their home if they had been given more information before they moved in, according to research from Virgin One.Its Cappuccino Test report questioned homeowners and estate agents on what makes an area up and coming, how they spot prosperous areas and the top turn-offs of […]

Independent view

A week is a long time in politics. A week is also a long time in financial services. Which is the longer time now is arguable. In fact, for possibly the first time ever, financial services has actually become politics. Whether it has risen or fallen to that status is also perhaps arguable.Every day – […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm