Despite valuation fees being listed on Key Facts Illustrations (KFI) given to the broker and borrower, the source told Mortgage introducer that the valuation fee detailed did not tally with the fees charged.
The source said: “The valuation fee is on the KFI, but the point is that it is sometimes not the sum being paid to the valuer.
Therefore when the packager quotes the sum it is receiving from the lender for carrying out the work, should it not also quote how much it is receiving in profit from the difference between that paid to the valuer and that received from the applicant? The transaction should be transparent. The lender pays a fee for the packaging – but should it make a second profit from the valuation fee?”
Vic Jannels, chairman of the Professional Mortgage Packagers Alliance, said: “Most packagers have on their application form an indication of the fee that is collected, which has a fee built in that is used for admin purposes. This would be refunded if the application failed. As it’s written on the application, the transparency is there. From the KFI point of view, because of the structure of the KFI it’s almost impossible to do. Having said that, so many packagers charge a small amount for the valuation and fund the rest themselves, or charge nothing. It would be hard to reach a consensus on this.”
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