Fees Paid To Brokers By Mortgage Lenders Are Far Too High

Procuration fees paid by some sub-prime lenders are too high.

Fact.

There can be no justification for some of the fees paid by lenders. Proc fees of 2.75%-plus are simply deplorable when it is clients who will ultimately pay the price through an extra loading on the interest rate they pay, be it at the front end or - as is more common with some lenders - at the back end after an initial deep discount.

Traditionally, high proc fees were justified by the relative complexity and extent of the work undertaken by the intermediary on behalf of customers with specialist financial needs; for those customers with more heavily impaired credit backgrounds, there was more work so the fee was higher.

But advances in technology mean obtaining the required information is now relatively straightforward so how on earth can lenders still justify paying fees of 2.75% or more?

Consumer protection is paramount. Those lenders that continue to hide behind the excuse that the fees they pay impact only on their own profit and loss accounts are fooling nobody. In the end it's the client that pays.

It's a sorry state of affairs when a lender's only method of attracting business is to pay a high fee.

The sooner the Financial Services Authority wakes up and takes a look at some of the players in this often murky sector, the better.

It's time for a change and we need it right NOW.

Mark Anthony Harrison has worked in financial services for over 16 years, mostly in banking but more recently with his own company http://www.capitalmortgagesolutions.co.uk.



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