Mortgages  

Mansfield eyes paying proc fees

Mansfield eyes paying proc fees

Mansfield is considering introducing procuration fees for mortgage retentions, with a decision expected shortly, according to one of the building society’s senior figures.

Increasing numbers of lenders have been bringing in procuration fees - a commission paid to the broker for arranging the loan or mortgage - during recent months, as a slowdown in the market leads to a greater emphasis on product retention and transfers.

Mansfield chief executive Gev Lynott told FTAdviser: “There is a marketplace slowdown in house purchase so for brokers to survive they will need to do more on remortgaging - so lenders should consider ‘should we be rewarding them?’

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“That is where the game is going to be - working your existing client base more effectively.”

The building society is also planning to enhance the lending criteria in its Versatility range, which was launched in February to cater for the specialist end of the market. Details are expected to be revealed “within a month”.

Mr Lynott said there had been a positive reaction to the product range, which includes family buy-to-let mortgages, self-employed and contractors home loans, interest-only options, and lending into and in retirement.

“We used to have 50 enquiries a day and now we are up to 150 a day – and part of that is due to Versatility,” he explained.

The building society, which prides itself on its face-to-face approach offering personalised lending, has been able to attract some of the consumers rejected by the larger lenders – including buy-to-let customers.

"Buy-to-let demand has really picked up since the regulations were introduced,” Mr Lynott continued, referring to the Prudential Regulation Authority’s changes to buy-to-let affordability checks, which came into force on 1 January, as well as the changes to income tax relief on finance costs.

“We have seen a lot more business come through, partly because of our more flexible approach and because the big players have been forced to tighten up.

"There is more space for us to say ‘we are still here.’

“Someone with a really nice property that is not generating a rental income could struggle to get buy-to-let. But it is a good property, so we will say ‘you have failed the coverage ratio, but have you any other means of paying if interest rates go up?’

“We will consider other assets and income. Because we are manual, we can say we are going to do it.”

Mr Lynott added one of the main problems faced by smaller lenders is getting the word out about their products, and he called for an online database similar to the one brokers can use when finding lenders who will finance self-build projects – a site known as BuildLoan.

“With self-build projects, brokers know they can go to BuildLoan and get access - why could we not do the same with underserved segments of the market?” he said.