Lenders are not ready to pay procuration fees through networks because they have not sorted out their back-office systems, says Whitechurch managing director Ian McIvor.
McIvor is concerned that after speaking with various lenders, some still intend to pay procuration fees direct to mortgage intermediaries and not through networks. This in effect will mean that intermediaries will have to give the fee to the network which will then have to pay it back to the intermediary.
McIvor says lenders need to start updating their systems as soon as possible but says he suspects they are losing focus in the lead-up to M-Day.
Lenders need to replace the name of the individual broker on their system with the broker's FSA number to make payment to the network possible.
McIvor says the small niche players which have had to prepare themselves from scratch seem to be ready but he says the “old dinosaurs” of the mortgage lending industry are the least prepared and warns of a knock-on impact on mortgage clubs.
Lenders say several intermediaries still have not rec-eived their FSA numbers which is slowing down the process.
Accord Mortgages sales director Ian Smith says some networks are giving lenders lists of their members. From these, a relatively small number will refer business to them so lenders are spending time unnecessarily inputting irrelevant data.
McIvor says: “Mortgage firms are behind in realising what networks are and what they have to do with ARs. They need to start thinking like the life and pension companies.”
Intelligent Finance head of intermediary sales Brian Ewing says: “It is just our fourth anniversary so we knew from the beginning that our systems would have to be designed with regulation in mind.”