I refer to the article in a recent edition of Money Marketing attributing comments to Stuart Bernau of Nationwide Building Society which made my blood boil. Indeed, I have taken a week to calm down before writing this.
I strongly disagree with his sweeping generalisation that the HBOS retention initiative “has not worked, has not been followed by the rest of the market and has ended up with poor products”, given that it is not the first such scheme available in the market, is still in its infancy and it has been widely reported that other lenders are actively considering their retention strategies.
While not all HBOS retention products have been competitive, there have been some competitive enough in rate and arrangement fee to recommend to clients after having followed the necessary sourcing procedures to make a sale FSA compliant.
In fact, some of these compare more than favourably to some of the retention products offered by Nationwide so does that make the Nationwide retention products poor as well? He goes on to comment that Nationwide is “working on maintaining intermediary relationships but not necessarily through proc fees”.
This has been necessary, as admitted by Mr Bernau and his colleagues at one of a series of breakfast meetings in Glasgow in early 2006 that Nationwide had taken its eye off the ball in terms of intermediary lending.
There is no doubt in my mind that the strength of feedback from that meeting, and most likely the other meetings as well, has contributed to their subsequent improvements in lending criteria (notably income multipliers), e-trading facilities and communication.
It is interesting to note that there has been no change in payments to intermediaries for either new or loyalty business and, their base mortgage rate apart, no products have been introduced without early repayment charges.
As an aside, I do believe that Halifax is also missing out on more retention business by not offering any retention products with no early repayment charges as customers can require these for genuine reasons. It should punish those who abuse this and not those who use it genuinely.
Mr Bernau’s comments indicate to me that although the mechanics for the intermediary in dealing with Nationwide have improved, perhaps the attitude of Nationwide to the intermediary market still needs more work and he should concentrate on that for some time instead of commenting on issues where Nationwide has a less than exemplary recent history.
Graham Kennedy Mortgages