AMI urges lenders to keep intermediary channels open

  • Story by: Sharon Flaherty
  • Magazine: FTAdviser
  • Published Thursday , May 08, 2008

The Association of Mortgage Intermediaries (AMI) director general Chris Cummings is urging lenders to keep their distribution channels open in the current turbulent times.

Advertising

Speaking to FTAdviser.com, he said, in order to protect consumers and intermediaries alike, keeping channels open was essential so that when market recovery begins, lenders still have broad geographical coverage.

"Lenders will bounce back quicker if they have kept open relationships with intermediaries," he said.

However, according to Louise Cumming, head of mortgages at moneysupermarket.com, it is likely that lenders will actually get choosier about the intermediaries they use.

"Lenders will probably get choosier about intermediaries and choose large ones to deal with and ones that have introduced good quality clients to them before," she said.

She added that mortgage lenders were also likely to do the same with consumers, and would likely look to ensure customers were tied into other products with them, such as current account that they must pay their salaries into.

She said lenders were also likely to continue pushing up interest rates and arrangement fees.

"There's going to be a lot more emphasis on customer loyalty going forward and lenders will only lend to customers they know."

Meanwhile, looking at the future of the mortgage industry as a result of the credit crunch, AMI’s director general said it was possible that the fallout could lead to regulatory change.

The comments follow a flurry of reader comments on FTAdviser.com about lenders using dual pricing for direct deals and intermediary home loans. (Click here to read story.)

To have your say on dual pricing and relationships between intermediaries and lenders, read the latest 'Home on the Range' blog.