Mortgage Introducer has been contacted by a number of brokers expressing their concerns over the future of competitive, available cover for mortgage brokers.
One source showed Mortgage Introducer a copy of a quotation received from one firm which would exclude a number of areas of cover, including claims by lending institutions and against single premium payment protection insurance (PPI) on secured loans.
Nick Battersby, compliance director at the Regulatory Alliance of Mortgage Packagers (RAMP), admitted the concerns held by brokers were shared by packagers.
He said: “Recent renewals I have spoken to people about show a toughening of criteria and an increase in premiums. Complaints are going to rise, with self-cert in particular and a lot of PPI claims still to come through as well.
"This is one of the things we are going to be talking about quite a lot as I think PI cover will become more difficult to get, especially if you have had any enforcement action brought against you.”
Richard Fox, chief executive of the Society of Mortgage Professionals, believed brokers would struggle to cope with the costs, should premiums go up, in the current market place.
However, Andy Pratt, chief executive of Alexander Hall, insisted: “If a firm has a strong compliance structure and is shown to be offering good quality advice with low complaints, they should have no problems.”
Meanwhile, Richard Farr, director at the Association of Mortgage Intermediaries, said that its research showed premiums were holding steady.
He commented: “We are always concerned about extra burdens for our members and this has been a concern for some time now.
"We’ve been doing some hefty research and found that despite these worries, premiums are going down. And with lender criteria tightening and the quality of business intermediaries are writing going up, this should see premiums stay down.”
But Neil Pointon, chief executive of PYV, warned: “There is an expectation of more claims on the horizon and mortgage intermediaries should check to make sure they have full protection and for any erroneous exclusions in a new policy.”
