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Lenders pledge not to tie proc fees to quality

Barclays and Nationwide have revealed they will not follow a high-street rival by tying the level of procuration fee they pay individual brokerages to the quality of business submitted.

It is understood that one major high-street bank is looking to determine the level of proc fee by the quality of business it receives.

The unnamed lender has reportedly developed a metric to assess different elements of brokers’ business, such as the quality of the cases they submit, how they interact with clients and their overall conduct.

Responding to a question from Money Marketing at a panel session at the Mortgage Business Expo in Manchester today, representatives from Barclays, Nationwide, Platform, GE Money and Virgin Money said they do not plan to go down this route.

Barclays head of national accounts Sarah Green said: “We will not be making such changes to proc fees.”

Nationwide senior manager of corporate accounts James Chidgey said: “We have got no plans at all to do that.”

Platform director of sales and proposition Lee Gladwell said: “As far as new ideas go I think this is a rubbish one. Proc fees are a valid part of the industry. It is our job to underwrite these mortgages and I think to tie them to quality would be an administrative nightmare.”

Virgin Money intermediary business manager Richard Tugwell said: “Using quality to determine proc fees is a blunt tool, it is more about educating people about why the case is not of sufficient quality.”

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