An Open Letter To Mortgage Brokers.

eightball_2

MSE_Martin wrote: »

This is something that worries me too... which is why I've both made representaions to the FSA about it, done it in broadcast and indeed even on prime time ITV - talked about the problem of lenders not allowing brokers to access deals (yet even with that, i still received broker complaints on that particular programme - can you believe it - it takes the cherry doesn't it!)

Yet sadly I haven't seen any movement on it. And it the damage to the broker sector being done by both that and the obvious massive decline in mortgage approvals, and lower required LTVs required to remortgage is a real worry to the sector and for consumers.

I think a lot of this has to do with you being seen as a GURU by most, as average jo has NO idea about financial workings and what you say gets passed as being advice as like bank "advisers" 95% of bank advisers cannot advise but the client is left thinking they have been advised
Dont get me wrong its no fault of your own you have obviously worked very hard to get where you are and good on you, I bet even if you plastered over your face "do not take my advice" while you presented a high percentage still would!! its just simply people just dont understand financial issues and why would they its not taught at school so who do you turn to the broker .....when there was a lot of endowment misselling.......the bank......that only has 3 mortgages...........the ifa .......that stitched my mate up.........or martin he seems to know what hes talking about its that or my mate well he got a good deal and it worked for him

All i will say is if you are a client and feel comfortable to do it your self do it! if not then take martins ideas (not advice:D ) to your/a independant broker and ask him does this suit my needs a good adviser will tell you if it does or doesnt but he/she will also tell you why it is best or why it doesnt work best for you and if you still not happy walk away ITS MOST LIKLEY TO BE THE LARGEST FINANCIAL TRANSACTION YOU WILL EVER ENTER INTO , MOST PEOPLE SPEND MORE TIME BOOKING THEIR HOLIDAY THEN SORTING OUT THERE MORTGAGE........SIMPLY MORTGAGES ARE BORING AND THEY DONT FULLY UNDERSTAND IT...........YET A HOLIDAY IS £3000 AND A MORTGAGE £150,000

TonyMason

I have been an independant mortgage broker for 20 years. I have dedicated my professional life to it. I have studied hard to get the FPC and CEMAP qualifications. I have dedicated my career to being as good as I can and giving the best possible advice and getting the best possible rate for my clients.

I have never in 20 years placed a mortgage with a lender as it pays a higher fee. I also have not charged my clients a broker fee.

My income in the last 18 months has gone down over 60%. I have decided reluctantly and after the hardest fight of my life for nearly 2 years to survive to throw the towel in and leave the industry.

The mortgage broker has been affected more than any other profession in the housing buying process and more than any industry in the UK. It is never reported on however. We are the forgotten industry left to hang. The FSA do not give a damn about mortgage brokers, in fact they would love there to be no industry left as its less work for them. The Council of mortgage brokers, don't make me laugh, they have done nothing to speak up for the broker.

The lenders who happily accepted our clients, yes our clients, for the last 10 years helping them make huge profits have collectively done their level best to destroy the broker market and you know what, they have suceeded.

The broker has nothing in his weaponry anymore. There is no new mortgage market as the housing market has been dead for 2 years. They cannot get the best deals as all the lenders dual price which means clients can get a better deal if they go direct. The direct lenders like HSBC do not use brokers anyway and they have all the best deals.

Lenders dual price also when the clients deal comes to an end of their rate offering better rates direct again. The final nail in the coffin has been the total death of the re mortgage market. I have had 50 or so clients in the last 6 months who have just stayed on their lenders svr as it is lower than any re mortgage rate.

Even if there were better re mortgage rates however, the fact lenders still basically do not lend over 75% still and 60% to get the best deals and the 25% price fall in the last 2 years means very few people have a 25% equity anymore so they are forced to stay with their lender.

Lenders are not lending and there is no market over 75% nearly 8 months after the bail out. The housing and mortgage market will only get close to normal when we get 90% or 95% deals across the board and reasonable rates.

That may happen but probably not before 2011. That is too late for me and most brokers. The level of brokers has fallen from 30000 to 18000 in the last year and will fall below 10000 by the end of 2010.

People will then have to go direct to their bank and get no choice and a hard sell on the insurance products.

Thats the implications. The FSA do not give a damn. The lenders want that.

I believe my leaving and others like me is a huge loss to the industry but I am past the point of caring now.

TonyMason

Martin

I refer to your comment on the other thread.

The broking industry is all but dead now. Those people whose livelihoods have been destroyed meaning often the loss of their homes, family and health is a massive traumatic experience. People will lash out. Although I do not condone the comments on the Cherry site, which i have not read I can understand them.

You see as we are mortgage brokers we are the forgotten industry. I have never once in the last year seen anything in the papers, on the tv or on the radio about the 40% and counting destruction of the industry.

As we are just " suits " and work in finance we are left to hang and no one cares. Our industry is destroyed like the mining industry in the 80's but I have yet to see the UK public taking to the streets in London on a march for brokers or indeed expect to see a film with Ewan McGregor playing a hard up mortgage broker anytime soon.

Please Martin do not try and make out now you are a bastion for mortgage brokers. You have helped to destroy the brokers income. Yes you have told people to go to brokers but basically to use them and do it yourself or ask for some of the proc fee back. You have told people not to use brokers who charge fees regardless of service, told them to go direct and told them to ask for money back. So please do not come on now pretending you did not as it does not wash.

Basically you want brokers to help but be paid no money for it.

You, the FSA and the lenders will be responsible for the total destruction of the broker industry and the outcome of people having to go to their banks , be sold their products only and be hard sold expensive insurance products. well done I hope you feel proud.

Also getting childish and throwing your toys out of the pram because people have been nasty and insinuating you will not tell people to use brokers is very childish and fly's in the face of your supposed impartiality.

Anyway its all irrelevant now.

A dedicated and honest ( about to be ex ) mortgage broker of 20 years.

Gorgeous_George

eightball wrote: »

I think a lot of this has to do with you being seen as a GURU by most, as average jo has NO idea about financial workings and what you say gets passed as being advice as like bank "advisers" 95% of bank advisers cannot advise but the client is left thinking they have been advised

That may be part of the problem. Another part is that many average joes/joannas have been poorly advised by professional advisers of one kind or another.

Whether it's a financial adviser at a bank (or salesman as I like to call them), an IFA or the spotty kid in Comet, advisers are often seen as modern day soothsayers. The truth is, nobody knows what the future holds but financial advisers' fear of our compensation culture means that they are more concerned about providing advice that is 'ok' and auditable rather than most likely to be right.

GG

harryhound

TonyMason wrote: »

People will have to go direct to their bank and get no choice and a hard sell on the insurance products.

That's the implications. The FSA do not give a damn. The lenders want that.

I believe my leaving and others like me is a huge loss to the industry but I am past the point of caring now.

I wonder if the Travel Agency and the Car Insurance brokers agree with you.
However I bet everyone who has flown with Ryan Air and Insured with Direct Line in the last 20 years does not?
This internet technology has been a powerful force in pushing down prices and streamlining commerce; meanwhile the bloke with the little shop in the high street has been put out of business by crippling rents and council tax..

Conrad

I've long derided the broker community, for the simple truth is there was an endemic sales culture under pinning everything.

Those neave comments along the lines ' I'm not a saleman, I just love helping people' are utterly misleading. Such claimants will know full well thier focus in every interaction is to generate income. Every work meeting they have ever attended has had a strong sales message running through it.

I for one am very glad the industry is shrinking as it is my sincere hope that the shiny suited, BMW loving salesmen are driven out.

Even now I hear of the salemen encouraging 2 year deals, merely so they get another sales opportunity regularly.

Then we get those wonderful 'free tribes'. There is nothing free about them. I know as I used to wrok for one. Thwe major focus is to bring about protection sales - those are the numbers these people walk around with in thier heads.

It's no wonder the public hold us in low esteem - we invite them in with the 'free advice' banner, and then do our level best to sell them insurance, when most clients will realise they can get it cheaper online or from Tescos or an IFA.

My mental image of these declining sales people is of a chain smoking, soverign ring wearing, disinterested in economics saleperson - yet claiming thier knowledge is so vital to assist in that huge life time commitment!! The irony, oh the irony.

Now, having said all this, there is another tribe in the broker community. Quiet self assured purposefull individuals that are happy to simply do as the client requires, without resorting to grubby protection selling (yes, yes I know protection can be important but that does not mean a saleman has to be involved in the food chain).

I do not advertise a 'free service' as I firmly believe this to be a disingenous claim. If the client requires my commitment, I usualy expect them to prove thier commitment to me with an up front fee. ALL OTHER PROFESSIONALS ACT THIS WAY. Can you imagine expecting your architect to work on commision based on the building products he flogged you!!

Conrad

harryhound wrote: »

meanwhile the bloke with the little shop in the high street has been put out of business by crippling rents and council tax.

.

I'm that little bloke in the high street, but am fairly busy as people simply cant have a grown up conversation with many Banks and certainly not get what they need on the net.

There is always a place for dedicated knowledgable local people.
Remember I mjeet with lender reps and gain insights that would never turn up in or be translatable to any moneysupermarket search vehicle or call centre.

For a start the heads of those firms aren't broking with real people day to day, face to face, so they wouldn't have the slightest idea of the needs of a great many complex individuals. !!!!!! in = !!!!!! out.

sarahemmm

Really sorry to hear your pain, Tony. Sadly, people like me, who do think carefully and use a broker, are in as much pain. We will suffer too, because when we are in a position to re/mortgage, our options will be that much more limited. If you can find any way to ride out the storm, I think you will find clients are there for you as soon as they are able to make a move.

FWIW, I've just watched one of my neighbours sell at 40,000 below her original asking price - that's pain!

harryhound

ALL OTHER PROFESSIONALS ACT THIS WAY. Can you imagine expecting your architect to work on commision based on the building products he flogged you!!

I thought architects got a percentage of the cost of the building they create. I've just asked a solicitor for a guestimate of the cost of conveyancing only to be asked as question one what the value of my sale is; don't see how that effects the amount of work to be done.

TonyMason

Conrad wrote: »

I've long derided the broker community, for the simple truth is there was an endemic sales culture under pinning everything.

Those neave comments along the lines ' I'm not a saleman, I just love helping people' are utterly misleading. Such claimants will know full well thier focus in every interaction is to generate income. Every work meeting they have ever attended has had a strong sales message running through it.

I for one am very glad the industry is shrinking as it is my sincere hope that the shiny suited, BMW loving salesmen are driven out.

Even now I hear of the salemen encouraging 2 year deals, merely so they get another sales opportunity regularly.

Even now I hear of the salemen encouraging 2 year deals, merely so they get another sales opportunity regularly.

It's no wonder the public hold us in low esteem - we invite them in with the 'free advice' banner, and then do our level best to sell them insurance, when most clients will realise they can get it cheaper online or from Tescos or an IFA.

My mental image of these declining sales people is of a chain smoking, soverign ring wearing, disinterested in economics saleperson - yet claiming thier knowledge is so vital to assist in that huge life time commitment!! The irony, oh the irony.

Now, having said all this, there is another tribe in the broker community. Quiet self assured purposefull individuals that are happy to simply do as the client requires, without resorting to grubby protection selling (yes, yes I know protection can be important but that does not mean a saleman has to be involved in the food chain).

I do not advertise a 'free service' as I firmly believe this to be a disingenous claim. If the client requires my commitment, I usualy expect them to prove thier commitment to me with an up front fee. ALL OTHER PROFESSIONALS ACT THIS WAY. Can you imagine expecting your architect to work on commision based on the building products he flogged you!!

My oh my that chip on your shoulder is more like a sack of potatoes. Are your comments meant to be taken seriously. Lets look at them.

1.

Conrad wrote: »

I've long derided the broker community, for the simple truth is there was an endemic sales culture under pinning everything. = probably but most likely in the banks where all clients will have to go to now.

2. Those neave comments along the lines ' I'm not a saleman, I just love helping people' are utterly misleading. Such claimants will know full well thier focus in every interaction is to generate income. Every work meeting they have ever attended has had a strong sales message running through it. - I do actually love helping people but I also have ambition to earn a decent living if I am dedicated to my profession and I do not see why I should apologise to you or anyone else for that.

3. I for one am very glad the industry is shrinking as it is my sincere hope that the shiny suited, BMW loving salesmen are driven out - that says a lot more about you than the industry I think.

4. Even now I hear of the salemen encouraging 2 year deals, merely so they get another sales opportunity regularly. - absolute rubbish. I have been recommending 3-5 year deals all year but no one is taking them as the svr is ( presently ) lower. No deal in 2 years is guaranteed with a non existant re mortgage market, direct deals and dual pricing, ignorance on your part is no excuse for being stupid.

5. It's no wonder the public hold us in low esteem - we invite them in with the 'free advice' banner, and then do our level best to sell them insurance, when most clients will realise they can get it cheaper online or from Tescos or an IFA. - under FSA guidelines we have to recommend protection products and have you heard cheapest in often not best.

6. My mental image of these declining sales people is of a chain smoking, soverign ring wearing, disinterested in economics saleperson - yet claiming thier knowledge is so vital to assist in that huge life time commitment!! The irony, oh the irony. - that again says more about you than the industry, no doubt you are perfect in every way possible.

7. Now, having said all this, there is another tribe in the broker community. Quiet self assured purposefull individuals that are happy to simply do as the client requires, without resorting to grubby protection selling (yes, yes I know protection can be important but that does not mean a saleman has to be involved in the food chain).

I do not advertise a 'free service' as I firmly believe this to be a disingenous claim. If the client requires my commitment, I usualy expect them to prove thier commitment to me with an up front fee. ALL OTHER PROFESSIONALS ACT THIS WAY. Can you imagine expecting your architect to work on commision based on the building products he flogged you!!

- no doubt people use you due to your humility. They pay you a fee to tell them to go direct to HSBC. Good for you.