The lender, which currently sources less than 1 per cent of its mortgages from intermediaries, took the step in response to requests from sourcing systems to provide the necessary payment calculation algorithms.
In the letter Rob Chesters, product performance manager for home buying at HSBC, wrote: “We fully understand this inhibits our ability to sell mortgage products through mortgage intermediaries, independent financial advisers and other intermediaries and that entry into this market will require liaison with yourselves.”
Chesters added that he did not feel it was appropriate to divert the resources needed to perfect the production of KFIs, given the low levels of introduced business the lender currently received.
Chesters ended the letter by saying: “HSBC is currently reviewing its policy on introduced business and we will contact you if our policy changes.”
However the chief executive of HSBC, Michael Geoghegan, poured cold water on any such review with recent comments that: “Our customers are beginning to see HSBC as a mortgage bank and do not need to go through third-party brokers.”
Currently the only HSBC mortgage products being sold via brokers are offset mortgages from the lender’s subsidiary First Direct. These are being sold on a trial basis by London & Country (L&C).
L&C mortgage specialist James Cotton said: “We have a pilot running until the autumn with First Direct and we will have to await the results to see whether First Direct wish to continue.”
The pilot will finish before the new mortgage regime begins.
Ray Boulger, senior technical manager at Charcol, commented: “Because HSBC does not accept much business from brokers many do not know that much about its products. It does however have some competitive fixed rates, a very good graduate mortgage and will often be generous with income multiples for banking customers.”
Rob Clifford, managing director of Mortgageforce, said: “It does seem astounding that a lender can capture a sizable portion of the mortgage market and still side-step the broker distribution channel.”
