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Proc fees set to be slashed

Independent mortgage consultant Kevin Duffy is warning that procuration fees could be cut in the next wave of belt tightening to hit the industry.

Duffy says mortgage brokers could be earning up to 10 per cent less by the end of 2008 as proc fees are slashed.

Royal Bank of Scotland cut its proc fees last November, followed by BM Solutions on Christmas Eve, and Duffy believes most lenders will cut their fees considerably this year.

He says: “If intermediaries have not seen the truck coming down the road already, they will be in for a big shock. The cuts in proc fees by lenders will not be a one basis point reduction. Intermediaries should be prepared to see a reduction by two or even five basis points.”

Duffy says mainstream lenders are holding discussions together more frequently than 12 months ago.

A Council of Mortgage Lenders spokesman says: “It is very difficult to predict what will happen in future. Lenders have been adjusting pricing in terms of the front-end consumers rather than cutting costs from brokers.”

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