HSBC to review procuration fee stance

HSBC to review procuration fee stance

HSBC has revealed it is reviewing its approach after becoming the sole major lender not to offer procuration fees on retention mortgage business.

The announcement follows the news that Nationwide is planning to introduce procuration fees by the summer, launched simultaneously to all intermediaries.

The building society will offer a procuration fee of 0.2 per cent to intermediaries for all existing customers switching product, and will include both prime Nationwide lending and its specialist buy-to-let arm, The Mortgage Works.

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Ray Boulger, mortgage adviser at John Charcol, said: "This leaves HSBC with the dubious distinction of being the last man standing amongst the major lenders in terms of holding out against paying procuration fees for retention business.

“The rapid adoption by many lenders this year to the principle of paying proc fees on retention business is due in no small part to pressure from Association of Mortgage Intermediaries."

HSBC has recently been trying to improve its reach with intermediaries, appointing Jackie Uhi, head of mortgage distribution, earlier this month.

The bank only entered the intermediary market in August 2015, and this was cited as one of the reasons behind its stance on procuration fees.

A HSBC spokesman said: “HSBC entered the Intermediary market relatively recently and as such there have been very few customers reaching the end of their initial incentive period. 

"The retention proposition for brokers will be reviewed in due course.

“HSBC customers reaching maturity have access to the same products as new customers (no incentive is paid to retain existing customers) which represent great value in the high street. 

“HSBC products and propositions are reviewed regularly ensuring they meet customers needs and fit with the strategic direction of the business.”

Responding to the comment, Mr Boulger added: “It is good to hear they are reviewing their position. It is the sort of response that we would expect, but it does not cover all the bases.

“Lenders over the past few weeks have been saying they are going to start paying procuration fees, and as some lenders have moved that has put pressure on other lenders to introduce it.”