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Brokers fight back

A war has begun. After weeks of frustration, watching several big lending players begin to even more aggressively undercut brokers through their direct channels, the intermediaries have decided enough is enough.

While some of the main distribution firms in the market previously called on the intermediary market to understand and make allowances for the strain being placed on lenders by the current market conditions, it is clear that even these firms now think that the lending market is taking the mick and taking advantage of the goodwill.

While several brokers have expressed concern that the Association of Mortgage Intermediaries has not been vocal enough on this topic, this week the trade body came out in defence of the industry.

AMI director general Chris Cummings says the trade body fully recognises the seriousness of the current situation.

He says: “We do have major reservations about the actions of certain lenders and the detrimental effect it is having on intermediaries and ultimately consumers. We have raised their issues with lenders directly and also in meetings with the representative bodies, CML and IMLA.

“We will continue to fight for a healthy intermediary market, which is best placed to serve the needs of consumers.”

In an email to its members this week, AMI senior policy analyst Andrew Strange says it has been “feverishly” working in the background to tackle the issue.

He says: “As a trade body, much lobbying work is done out of sight, and if every issue was raised publicly, our lobbying influence would be adversely effected.”

Strange says it has engaged with a number of stakeholders to tackle the problem such as the CML, IMLA, FSA. He says it is now considering involving the Office of Fair Trading in the problem.

But it is not just AMI that is fighting the cause but a number of distribution firms and sole traders have decided this is the week to declare war on the lending market.

The week started off with The Mortgage Practitioner sole trader Danny Lovey’s rallying letter to AMI to defend the intermediary market from the actions of the lenders.

Personal Touch Financial Services has also decided it has had enough. It was originally one of the seven major distribution firms to call for understanding of the strain being placed on lenders but it has clearly now changed its opinion.

The firm has now decided to set up a rogues gallery on its website page of all those lenders that are directly undercutting the broker market place.

In a message on its site, the firm says: “Many of the activities are absolutely disrespectful to the broker market and breaking agreed protocols. This is not about profit – this is about distribution. This practice has to stop! Brokers only want a fair playing field and parity. In a tough market place, we feel as though brokers are being kicked while they are down.

“In a fair market place we can all prosper together, irrespective of the challenging circumstances. Lenders who continue these unfair practices should come clean. They should be honest about their attitude to the broker market place.”

In addition, Premier Mortgage Service managing director John Malone has also sent an email to its members saying that it is meeting, speaking and lobbying lenders to respect the intermediary channel.

I expect even more firms will come out over the next few weeks to challenge lenders over their practices but the market will have to wait and see how lenders will respond. One thing is sure – lenders should be seriously reconsidering their strategies as brokers have a very long memory and will not forget this treatment quickly.

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