Brokers accused of chasing commissions

Wednesday, February 20, 2008

MORTGAGE brokers who have had their commission payments cut by some banks are shifting their business to other lenders to get higher payments, it was alleged yesterday.

Any move by brokers to place mortgage business where they will get the highest commissions is contrary to the provisions of the Regulator's Consumer Protection Code.

Under the code, brokers are required to act in the best interests of consumers when providing products or services.

In the past few months Ulster Bank and Permanent TSB have cut the commissions they pay brokers who arrange mortgages.

Shift

Yesterday the head of EBS Building Society's new broker business said his firm was seeing a significant shift of broker business away from Permanent TSB and Ulster to his new operation, Haven.

Tony Moroney of Haven said: "Brokers who were traditionally loyal to Ulster and Permanent TSB are much more inclined to do business with ourselves."

He acknowledged that brokers placing business where they get the best commissions is banned under the Consumer Protection Code.

EBS's Haven is paying 1pc of the value of a mortgage to brokers who generate more than €5m in business a year.

However, Mr Moroney stressed that, in the case of Permanent TSB, other factors came into play for brokers such as the competitiveness of its rates and the speed at which it approves loans.

Chairman of the Professional Insurance Brokers Association (PIBA) Jack Fitzpatrick denied yesterday that brokers were persuading customers to take out mortgages with lenders that pay the best commissions.

"There is no question of business being switched by brokers to EBS because they are paying more than PTSB or Ulster. Brokers are obliged to act in the best interests of consumers."

He said Ulster had cut the commission it pays from 1pc to 0.50pc, while Permanent TSB has cut its commissions by a similar amount.

Source

http://www.independent.ie/business/irish/
brokers-accused-of-chasing-commissions-1293980.html