Trade bodies have reached a landmark agreement over panel removals and have published guidance on how lenders should approach the issue.
Over the past six months, dozens of brokers have contacted Money Marketing sister-title Mortgage Strategy complaining that they had been kicked off a lender’s panel without explanation and without a right to an appeal.
The guidance, produced by the Association of Mortgage Intermediaries and the Intermediary Mortgage Lenders Association, seeks to ensure brokers get a chance to defend themselves, unless they are suspected of committing fraud.
While the guidance is not binding, it says lenders should advise brokers of the quality measures they apply and which performance measures might lead to disciplinary action.
The trade bodies have not insisted on a standard appeals process but the guidance says there should be an appeals process in most cases (except for fraud) and that this should be “open and transparent”.
Finally, it says lenders should not remove a broker based on information purely from another lender unless it is backed by evidence. However, the exception to this point would be if a criminal conviction was uncovered or a club or network provides information that warrants removal from the panel.
However, the guidance does make specific reference to lenders’ desire to “choose who they do business with”.
AMI chief executive Robert Sinclair says the guidance should leave brokers confident that they will be treated appropriately and are given a fair right to appeal.
He says: “It is very personal for the people it happens to and so whilst the numbers might be small, once it happens to somebody it is significant. Therefore it is important then that they feel the processes they have gone through with lenders are robust.”
IMLA executive director Peter Williams says: “My instinct is for many lenders this captures what they were already doing.
“But this is really about giving everybody a sense of what everybody else is doing and, hopefully, a few outliers coming into line and everybody else being comfortable with what’s happening.”