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Portman may link payment to product type

Portman Building Society is reassessing the way it pays procuration fees by looking at paying in relation to the type of product the intermediary has sold.

Group development dir-ector Matthew Wyles says there is a “bizarre illogicality”, with lenders paying a fixed procuration fee irrespective of the margin and duration of the product.

The society is talking to brokers about a plan to tailor procuration fees to the shape of the product.

Portman argues that a broker selling a five to 10-year fixed-rate mortgage should be rewarded for bringing in better business than a broker selling a two-year fixed-rate mortgage.

The society has also been granted board app-roval for a sub-prime mortgage and is developing systems and underwriting procedures to support the product. It believes a med-ium-sized lender cannot remain competitive with just a prime offering.

Wyles says Portman is looking at other mutuals with a view to consolidation. The society consolidated with Staffordshire Building Society last year.

Wyles says: “The most objective commentators cannot fault the logic. Cur-rent proc fees are not logically correlated.”

Savills Private Finance IFA Tom Bland says: “It is totally understandable from a lender&#39s point of view as they have to make sure the books balance and make sure that the business they are doing is worthwhile.”

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