Countrywide group chief executive officer Grenville Turner’s comments at the Building Societies Association conference last week that mortgage brokers were holding lenders hostage in the run-up to the crisis have sparked outrage among some advisers.
Turner said intermediaries held too much power in the period before the credit crunch and it is a good thing that around half of mortgage lending is now direct.
He said: “The power that intermediaries held to influence lender decisions was probably in excess of where it should have been.
“What we needed was a situation where the intermediary sector is important, healthy and encouraging but not necessarily a dominant one and certainly not to the level that they can hold influence over the lenders.”
Turner added that he welcomes the change in the ratio of direct-only lending.
He said: “We have seen a change in direct mortgages and that is a good thing so that lenders should not be held hostage by intermediaries. I am all in favour of a healthy adviser sector but a healthy sector is one with a sensible, balanced relationship between the lender, the intermediary and the consumer and I am not sure that balance was there in 2005 and 2006.”
The Mortgage Practitioner principal Danny Lovey says: “That is ridiculous. It was the lenders that were always trying to go for market share and by using the brokers.” Emba group sales and marketing director Mike Fitzgerald says: “Turner does have a point when he says a fairer distribution of mortgages around
50/50 is a good idea but with branches closing, you need a good mix of brokers. Otherwise, the only people who suffer are the consumers.”