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An Open Letter To Mortgage Brokers.

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An Open Letter To Mortgage Brokers.

edited 30 November -1 at 1:00AM in Mortgages & Endowments
176 replies 28.2K views
MSE_MartinMSE_Martin MoneySaving Expert
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edited 30 November -1 at 1:00AM in Mortgages & Endowments
Dear Mortgage Brokers.

It's come to my attention recently that there are a small number of brokers out there who see me as a figure of hate, in fact I've even had some brokers anonymously contact me to request I end my life.

Of course thankfully there are many brokers who understand the work I do, and support it, and contribute to helping consumers on this site. Yet I'm concerned about the damage the minority may cause the majority.

What I find most bizarre about this is I've spent my entire career being a supporter of the mortgage broker industry. I've lost count of the number of people who've approached me in the street and said "I got a great mortgage deal, by going to a broker as you suggested." or "I didn't go to my bank this time, I used a whole of market broker, because I wrote it down when you said to on the TV".

Therefore to be attacked by a small segment of the broker industry seems strange. The banking sector, claims handlers, secured lenders... I'd be less surprised by, but the one advice sector I actively support and postively push people to go to?

Cherry

The focus of the venom seems to centre around the forums of a small website called Cherry, which even apparently has a board dedicated to me. I did once read what it said, yet many of the comments got so ridiculous, and libellous, it became no longer worth my time or energy to do so.

One of the main problems with Cherry is that someone posts an inaccurate comment about what I've said, and then people wind each other up. Yet the info is usually completely erroneous.

I suspect some of it is to do with the fact I turned down an invite to discuss things with brokers on the site.

To be honest I get about 300 requests a week for similar things, and most, many much bigger institutions don't take umbridge when I turn them down. Yet as I said in my reply, I'm happy to engage with brokers here on this site which reaches many more people and, I suspect, brokers (and I hope this thread goes some way to do that). Though I'm not sure that was ever actually communicated.

My view on brokers.

So let me yet again, clarify my view on brokers. For the many years I've been doing this, whenever talking, broadcasting or writing about mortgages my constant push has been to say use a "whole of market" mortgage broker (well since the term came in anyway) to get you the best deal.

Of course as this is MoneySavingExpert my agenda will be to do it fee-free if you can; though in recent tough times I've actually shifted my stance slightly as more brokers charge in tough times to be much less rigid on that push as getting good advice should be the primary focus.

To those brokers who've made their minds up that I'm anti-broker based on what they've heard. Why not read what I actually say in the full guide to mortgage advice and judge the stance for yourself? The opening sets the scene pretty well...

"Don’t trust bank or building societies' mortgage advice; they’ll just flog you a mortgage from their own limited range. Use this broker plus technique to get free advice on the best deal and possibly grab cashback too.

First use a whole of market broker to find the right mortgage and use its clout to help you get accepted. Plus, as sadly some lenders have stopped brokers accessing their products due to the credit crunch, to ensure you get the very best deal, you now need to check some specific lenders yourself."

Sadly in recent times the growth of direct deals has meant I've added a second stage of suggesting people check out the FSA's website AFTER going to a broker to check there are no deals being missed, then going back to the broker to discuss it - which enables the broker to weigh up the pros and cons of all deals with their client.

While I know for brokers' pockets, it would be better if I didnt mention this, I'm sure all reasonable brokers will understand that my prime concern is to provide consumers with all the info and therefore this is something I need to do.

However I know at the moment the lack of mortgage business coupled with direct deals is hurting mortgage brokers a lot and I suspect this is one of the reasons why anything that isn't a complete "just use a broker" comment may upset some in an industry that's been hit by poor economic time.

For me lenders withdrawing deals from the broker market so they're only available direct is a retrograde step, and anti-consumer, something I've written about before here, and even broadcast about the issue on prime time ITV.

What about cashback mortgage brokers?

I know there's been some comment about the fact that I include the few cashback brokers in my guide. First of all I feel it's entirely appropriate to let people know about this option, that's what I do in all subjects.

However the frustration and the hatred I've read about some of this, I suspect comes mostly from people who've never actually read what I say. This is from the guide and the font sizes used here are as in the article.

"Yet remember this is ONLY for the very money savvy, who know and can identify exactly the right mortgage for themselves. Do remember...
...for most people, a broker’s weight on your side for £100,000s worth of mortgage transaction’s worth more than a few hundred quid cashback."

In earlier incarnations of the guide (now quite a long time ago) I did include the option that people could go to a broker, get the info and then process it through one of these sites. [/b]

After polite representation and legit argument from some brokers on this site, I changed my stance on that, as I agreed with the points made. It now says...

"The more loophole savvy of you may have worked out that you could of course go to a fees-free broker (or even a fee broker as long as the fee isn’t paid until transaction), then process its recommendation via a cashback site. This is a balance of ethics and practicality."

"By doing this you have taken the broker's time but not allowed it to be recompensed for the advice by gaining a fee. Overall, it's likely you'll want to stick with the broker who gave you the best advice, but the option to cut the cost is always there."

And remember this is after an explanation of why keeping an advisory broker working through the process is worthwhile as the support is needed.

I consider this to be a totally reasonable inclusion in the guide. Though it's something I don't think I've ever mentioned on TV or radio as in the much shorter time I'm given it's not worth prioritising.

It's worth noting that our (admittedly very rough) figures show very substantially less than 0.1% of readers of the guide actually click through even to bother to look at the cashback sites.

Should I change my stance?

If I did, it would be to not suggest people use brokers. I don't believe that's appropriate, though sometimes after some of the venom, I get tempted for a second or two. I will continue to support the broker sector.

I don't know what impact I've had on the market place, but as much of the complaints are that I'm too influential, if that's true, there will be many 100,000s who've gone to brokers because I've said to.

Someone not qualified shouldn't talk about mortgages.

This is one of the complaints I find, frankly, risible. To suggest only mortgage brokers can write or talk about mortgages is bizarre. It would seem that mortgages should thus never be on TV, radio, web or in newspapers in that case.

Of course I'm not a qualified mortgage broker. My entire stance is that I write NOT as part of the finance industry. I am a journalist (a qualified one at that) and that's my work.

Yet there is a difference between talking about the issues happening, the trends and extolling people to act (rather than how to act) and telling people what to do. I have an enormous mailbag, many thousands of emails a week, and concern over the mortgage is one of them.

So while I think it's well worth while warning people to "check they're not overpaying" and that "pundits predict the end of cheap fixed" and explain how mortgages work. I ALWAYS refer people to mortgage brokers to look at someone's specific situation. This is the great contradiction.

Brokers are doing themselves no favours.

Having said all that, I want to make it plain that some of the nasty attacks that I've seen recently, do the broker industry no credit and I would hate the behaviour of a few to discredit that of the many.

I am also saddened at the very few number of brokers who've come here, to make unfounded derogatory comments, in all areas, and risk ruining the work this site does to help many people.

Many of these bring the broker industry in to disrepute and sully the reputation, the last thing that is needed at the moment. In one thread where a mortgage broker tried to discourage others from helping people here, (s)he was roundly lambasted by members of the pubic and sadly was another bad notch.

Again I suspect that's because the premise started by saying this site recommends people to go it alone or through comparison services - which actually is the opposite of what I write. The shame for me is these comments are made based on such erroneous statement; I don't understand why they're written.

To conclude. I intend to continue to do what I do. To continue to suggest people use whole of market brokers. And to continue to ignore some of the ill-founded and ignorant comments I've read, but respond and react to those trying to make constructive points that will help consumers.

It is my hope that this open letter clears the air, and (yet again) clarifies my stance. It's my hope that most reasonable brokers will see we're all on the same side in helping consumers get the best deal.

Kind regards

Martin Lewis

PS Please feel free to link to this thread from other arenas that brokers will see.

PPS This is a first draft and needs some proofing which I will come back and do later. I will also respond to any further points raised in this rather than below.


1st Update. 11.30am Mon 1 Dec 2008

Thank you for all the feedback. I just wanted to make clear that the vast majority of brokers on this forum have always been polite and helpful. In fact when I redrafted the latest version of my mortgage broker guide I came here for feedback before it was published and there were many helpful tweaks because of the brokers.

Now to answer specific questions.

"First you advised people to fix, now you're advising people to ditch their fix"

This seems to be something many brokers who seem to have come from the Cherry site are saying. I find this confusing, as I've never a. Advised anyone. b. Written people should fix. c. Written they shouldn't fix.

This is one of those "please actually read what I wrote, or listen to what I said rather than what you've been told I said, scenarios."

A. Advice. This site doesn't give advice, it gives information. It never mentions specific mortgages and always directs people TO MORTGAGE BROKERs.
B. Telling people to fix. The nearest this site has got is to say "if you're going to fix imminently, fixed rates are rising so act quickly" that's not the same as saying FIX your mortgage. It's an urge to sort it soon - again DIRECTED TO A BROKER and never about a specific product.
C. Ditch your fix. Again I certainly thing that'd be wrong for the vast majority of people. Yet it's what everyone's asking, so I produced a checklist and told people in the rare circumstances where it may add up - to GO TO A BROKER. You can read exactly what was published here (top left of this). But here are a few highlights...

i. It was titled "Fixed mortgage? Can you ditch & switch to a low rate deal?" note the question marks.
ii. Then having explained that some on variable rates would gain it says "Ditch your fix checklist! By definition, those on fixed-rates haven’t gained. Many are asking whether ditching & switching, even with a penalty, will save you cash. Here's the checklist:"
iii. Then after the checklist it says "How to find out: If the checklist makes a ditch, switch & save look possible, contact a whole of market broker to do some detailed comparison numbers, incl. switching fees. Most reputable brokers won’t charge you unless you actually end up getting a new deal through them."

I'm not quite sure how anyone can see that as a call to ditch your fix... but there we go.
Martin Lewis, Money Saving Expert.
Please note, answers don't constitute financial advice, it is based on generalised journalistic research. Always ensure any decision is made with regards to your own individual circumstance.
Don't miss out on urgent MoneySaving, get my weekly e-mail at www.moneysavingexpert.com/tips.
Debt-Free Wannabee Official Nerd Club: (Honorary) Members number 000
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Replies

  • JF77JF77 Forumite
    303 posts
    Just wanted to add my support for you. I love this site and would really miss it!

    I feel that you respond well to issues that arise. I mean who would have thought economic events would turn out to be such a roller coaster?

    There have been loads of threads lately from people wondering whether they should jump off fixed rate deals so it was essential that this be addressed and Martin did so.

    He never told anyone to ditch he simply tried to answer the questions that people were asking and, if anything he has probably given lot's of people some reassurance.

    As for the broker's and adviser's well I think they have given great advice but, some have been a bit off of late.
    Excited for Florida - May 2012 :rotfl: :rotfl: :rotfl:
  • theboylardtheboylard Forumite
    1.2K posts
    Part of the Furniture 1,000 Posts Combo Breaker
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    A quick reply - I found MSE when I was in trouble.

    The advice, guidance and ongoing support have been great and I am now far more conscious of seeking the advice I need when I don't know all the answers.

    I have used a very good IFA for nearly 7 years now. He helped us when we moved from the One Account to Birmingham Midshires.
    A few years later, we needed to remortgage and clear debts and my man recommended a sub-prime based on our current situation. That was in October '05, by the following March we still didn't have a firm mortgage offer so I returned to MSE.
    Based on Martins' Mortgage guide, I contacted a whole of market, fees free broker (my good lady also contacted a broker, who was neither whole of market nor fees free but was very proactive, that'll be where the money goes but they weren't competitive) and had an offer fairly promptly (within 4 weeks).
    Admittedly had to give the broker a public shoeing once we had been passed on to the applications team, but overall we had an excellent mortgage from a high street name and we were all done inside of 10 weeks.

    So, brokers are a valuable resource - you are specialists after all - and I think Martin is doing the right thing, educating those of us who realise we don't know it all.

    This is something I am now doing with my children, trying to help them realise how important financal understanding is (know where to go for information, ask questions and don't be fobbed off with bank knows best), but the best bit is that sometimes you have to pay to get the best advice, whether it be upfront as a fee or as a result of making your own decisions, as long as you have learnt something then hopefully you won't be in the same position again.

    So, are the brokers who do Martin and this site in general down, those most affected by his recommendations? I don't know but ...

    I started to write something there and decided not to.
    As someone who has benefitted from the advice and guidance available from Martin and his team, plus the many users who have been kind enough to share their thoughts/opinions, my bias is clear - 'wom' brokers have their place alongside independants, websites and tied agents, different strokes for different folks - and I will use any and all available means to ensure I get a fair deal.

    Cheers to all, and thank you Martin.
    4kWp, SSE, 16 x 250w EcoFuture BoB with retro-fitted SolarEdge P300 optimisers & SE3500 Inverter, in occasionally sunny Corby, Northants.
  • poppy10_2poppy10_2 Forumite
    6.4K posts
    Part of the Furniture 1,000 Posts
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    Jeez, can't believe you have been getting death threats from mortgage brokers. Please don't stop giving your advice, you have helped far more people than you have annoyed.
    poppy10
  • my little input for what it's worth is that generally this site offers a wealth of information for consumers, and often brokers and whilst there is always liable to be friction at times that's half the fun of it.

    some of the snidey comments from both sides are a bit embarrassing but that's life!
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it.
    This signature is here as I follow MSE's Mortgage Adviser code of conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.



  • Poppy10 wrote: »
    Jeez, can't believe you have been getting death threats from mortgage brokers.

    Those sort of people really need to get a life.

    Some brokers are getting very upset and frustrated about their livelihood disappearing, and are hitting out at everyone.

    Although I'm quite new to the site, I enjoy it immensly. I like to see a bit of banter and disagreement now and again, from an entertainment point of view, but it should never descend to a personal level.
    I am a Mortgage adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • Important update! We have recently reviewed and updated our Forum Rules and FAQs. Please take the time to familiarise yourself with the latest version.
  • Gorgeous_GeorgeGorgeous_George Forumite
    8K posts
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    Until such time that a law is passed requiring all borrowers to reach NVQ Level 2 in commonsense and financial awareness, there will be a need for mortgage brokers.

    A good broker can save a lot of time, stress and money by finding and securing the best (or near best) deal for their client.

    GG
    There are 10 types of people in this world. Those who understand binary and those that don't.
  • To suggest only mortgage brokers can write or talk about mortgages is bizarre.

    Very true. Any intelligent person who is good with figures will know 95% of what a broker knows about mortgages.
  • grogdoggrogdog Forumite
    295 posts
    lethal0r wrote: »
    Very true. Any intelligent person who is good with figures will know 95% of what a broker knows about mortgages.


    if you think it is that easy why dont you have a go at passing the exams:rotfl: :rotfl: :rotfl: :rotfl: :rotfl: :rotfl: :rotfl: :rotfl: :rotfl: :rotfl: :rotfl:
  • MSE_Martin wrote: »
    ...I suspect most comes from people who've never actually read what I say.
    grogdog wrote: »
    if you think it is that easy...

    Perhaps you are the kind of person Martin is talking about. I said nothing about it being easy.
  • mavelimaveli Forumite
    576 posts
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    start of this year I went to 4 of these so called "whole of the market" advisors (including london and country) for a mortgage and none of them could recommend me the 0.23% and 0.25% above BoE rates offerd by HSBC and Northern Bank. I think we should start a competition here for these independant advisors to find out the cheapest fixed and tracker available now. I am sure there will be many includimg me will beat them.

    At the same time I am not a big fan of Martin as I used to be after the whole Icesave episode and his advise on Fixed to tracker.
This discussion has been closed.

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