Lovey, 65 this summer, said his decision to retire was driven by “frustration” with the market and the fact that he was 'not enjoying it any more'
If the market was not so hostile Lovey said he would be winding down his business more slowly over the next few years but added that the “stressful” environment had made making money difficult as, “the intermediary market is stuck between a rock and a hard place”.
Lovey currently has no plans to stay in the mortgage market, even in a consultancy role, though he has said he will play introducer to his existing clients if they need him to refer them to a good adviser. All of his current clients are being handed over to a “trusted sole trader” whom he refused to name.
The intermediary market is in for tough times ahead according to Lovey, who predicts a harsh future for the industry.
“I don’t see any fundamental improvement for some time,” he told Mortgage Introducer. “The money just isn’t in the system and the lenders that are left can take their time choosing the best customers.
“Brokers are being used and abused by lenders and ultimately we’re left playing piggy in the middle.”
Lovey accuses lenders of preferring to deal with the customer direct so they can cream off a bigger margin . That fact was highlighted last week by Defacto which reported that direct-only mortgage deals accounted for 53.7% of the mortgage market in April compared with just 22% in 2007.
Alarmingly in April 2007 there were 590 direct-only deals compared with 1,400 in April 2010 and Lovey says it’s first time buyers and other customers who are paying the price.
“It’s the people who really need mortgage advice who are being deprived of it,” he said. “First time buyers can’t afford the more expensive deals on offer in the intermediary market, but going direct to lenders means they’re getting a biased sales pitch, masquerading as advice.”
Lovey suggests that the FSA keeps moving the goal posts, lenders are reserving the best deals for their direct customers and brokers cannot compete when even remortgage business is under strain because borrowers are better off staying on lenders’ SVRs or lenders have 'special deals' to retain the quality customers and the intermediary cannot compete
“The mortgage broker is under attack from every quarter,” he added.
He praised the Association of Mortgage Intermediaries however, saying that they have done a great job lobbying on behalf of the broker community.
Unfortunately though, “AMI cannot control what lenders do”.
In spite of his disillusionment with market conditions, Lovey says he is bowing out gracefully.
“I’m not leaving with any bitterness. And I wish all of the brokers who have managed to survive this the best of luck for the future.”
