Halifax and Virgin Money have denied allegations they removed mortgage brokers from their lending panels without warning or explanation.
Several advisers have complained on adviser forum Cherry that they have been removed from lending panels with no prior notification and without being given a reason.
Halifax and Virgin Money have disputed the claims, and spokespeople for the companies said decisions to take brokers off of their panels are “not taken lightly”.
One broker, known as ‘Blueboy’ on the forum, alleged he was locked out of his Halifax account a year ago and told that his membership was under review, but not told why.
He said he has received no official reason from Halifax, but claimed during a call with the lender a phone operator told him informally the decision was unrelated to his behaviour, and linked to “people you worked with”, though it is not clear if this meant colleagues or clients.
Since the decision meant he was no longer whole of market, the broker, who asked not to be identified, was dropped by his network.
Through contacts he was able to buy into a company where he is now managing 25 mortgage brokers.
He said: “It can literally finish you in the job. I was distraught. I was in tears. I’m 54 and have been doing the job since I was 40 and never had a complaint.
“I wrote to them ages ago asking for reinstatement. It’s the old get-out: we have the right to refuse entry. There’s no comeback. Everyone’s frightened.”
Other brokers have criticised the lack of support for those removed from panels.
Brokers pay professional indemnity insurance and other levies to make sure bodies are set up to help the consumer, but can be left adrift themselves, they complain.
Another London-based broker, known as ‘Shahgeeisgr8’ on the forum, told FTAdviser he was automatically removed from Halifax’s panel after the firm he worked for was dropped in March 2012.
“There’s no warning system. You were good Friday evening and suddenly on Monday morning you are gone,” he said.
He claimed he wrote to Halifax but did not receive a reply. His MP also wrote on his behalf but was allegedy offered only vague reasons for the lender’s decision.
The broker was later removed by Virgin Money, which he believes took its cue from Halifax.
“I’ve been on a roller coaster. Brokers have no complaint channel, as the final say rests with lenders and there is no limit to the duration of a ban,” he said.
“Mortgage brokers are the weakest link. There is no safety net for us. I’ve seen brokers work for 20 years and have this happen to them. As we speak, the process is still going on. I would not encourage someone to come into this profession.”
He said the Association of Mortgage Intermediaries, which he contacted, has been “impotent.”
Other advisers also on the forum also claimed they had been removed from Halifax’s panel with no apparent reason or investigation.
Halifax and Virgin Money declined to comment on specific cases, but deny wrongdoing.
A spokesperson for Halifax said brokers are only removed from its panel where there is “significant evidence inaccurate or fraudulent applications and supporting documents have been intentionally provided”.
Brokers are told of decisions, and can appeal, she said.
Graeme Tones, spokesperson for Virgin Money, said it was incorrect to suggest that brokers were removed from its panel because they had been removed by another lender.
Robert Sinclair, chief executive of AMI, defended the body’s record of protecting brokers. “We continue to be frustrated by the law regarding tipping off which prevents lenders and AMI from assisting where there is suspicion of fraud, even from the customer perspective.”
Adviser View
Ray Boulger, senior technical manager for John Charcol and a member of the Association of Mortgage Intermediaries board, called for regulatory intervention to address unfairness in the market.
He said: “Courts can sit in private, and there ought to be a way for a regulator to hear both sides, where a broker would be given a fair hearing and will know the reason for removal.”
