Michael J Cutting, broker at Transfax Financial, said: “Look at the product illustration as produced by Trigold pre-‘Mortgage Day’.
“This contained all the client would wish to know in two pages of actual product information and a three-page (maximum0 ‘Reasons Why’ letter.
“We used to have this signed by the client and a copy on file; this coupled with our eight-page factfind completed a good part of the broking process as far as the client was concerned.”
And one software developer who has been implementing a software system for a medium-sized broker/packager in the mortgage business since May 2004, commented: “I have had a first hand view of all of the issues, and areas such as the KFI have been pretty much only my domain.
“The longest KFI was from Platform and the page length was 12. But the main problem I have encountered with KFIs is certain lenders’ treatment of broker fees when a case is packaged to them from an intermediary.”
“As far as I am concerned this is an overall cost to the client and should be included in the calculations of the APR.
“However, some of our lenders do not see it this way. This leads to the misleading offer KFI from the lender which sometimes shows a different APR to the one we produced in the illustration, as we included our fee in the APR and the lender has not,” he said.
He added that as clients are supposed to use the APR figure to compare deals it is very frustrating as the lender treats the deal as a client to lender relationship where the client is borrowing the broker fee as part of their loan.
He said: “We need to represent this instead as a client to broker to lender relationship and the broker fee should be included in the APR as the client will never receive our fee in their borrowing. Our fee is a cost and should be reflected as such in the KFI.”
To lend your support to the campaign e-mail Dippy Singh at: [email protected]
