Lender and broker trade bodies are close to agreeing a set of principles for lenders to follow when they remove brokers from their panels – but lenders are warning not to expect sweeping changes.
Last October, the Association of Mortgage Intermediaries chief executive Robert Sinclair reignited the debate surrounding broker panel removals by calling for a standard route of appeal for brokers who have been kicked off a lender’s panel.
Lender trade bodies were wary about committing to a standard appeals process and unsure about setting up an independent appeals board paid for by both lenders and brokers. But the Intermediary Mortgage Lenders Association agreed to work with Ami on the issue of panel management this year.
At a panel discussion at the Financial Services Expo last week, Money Marketing sister publication Mortgage Strategy asked if an agreement had been reached on a common appeals process for brokers.
Imla chairman Charles Haresnape (pictured) said there would be no big changes but “common principles” were being agreed. He told delegates: “No one should expect a full, common process across all lenders. What we are agreeing is common principles and those are the same as now.
“What changes can we make? To make sure intermediaries believe us when we say there is a right to a conversation – we will do that. We realise the significance of the consequences.”
Panel removals have been a growing problem and in February the FCA provided data to Mortgage Strategy showing that lenders had removed 297 directly authorised and 379 appointed representative firms from their panels between April 2010 and January 2014.
Brokers removed from panels have criticised the lack of communication from lenders about how the decision was made and the lack of an opportunity to defend themselves.
Mortgage Strategy has seen letters where major lenders have refused to give the removed broker a reason for their exclusion or a chance to appeal the decision.
At the debate, Sinclair said Imla and Ami were “very close” to agreeing a set of common principles for lenders to follow.
Mortgages for Business managing director David Whittaker said the current situation with panel removals is a “one-way street” against brokers. He said: “Some of our major institutions have been caught being negligible, incompetent, reckless. Yet these organisations can take away a broker’s right to trade with no accountability. So I welcome the fact there is a much greater dialogue from both groups but I still do not think the balance is right.”