NACFB issues warning to brokers over excessive fees from lenders
Article source: www.introducertoday.co.uk
The National Association of Commercial Finance Brokers (NACFB) has recently issued a stern warning to its commercial mortgage broker members to be on their guard due to the substantially higher fees currently being charged upfront by some unscrupulous mortgage lenders.
This stern warning comes after the National Association of Commercial Finance Brokers (NACFB) had received quite a substantial number of calls from its mortgage adviser members concerning this particularly serious issue.
The Chief Executive of the National Association of Commercial Finance Brokers (NACFB), Mr Adam Tyler, confirmed that he had taken a large volume of calls in the last couple of weeks from commercial mortgage brokers, who were greatly perturbed by the fact that some mortgage lenders are only willing to consider putting a mortgage deal through on the basis that they will receive payment of a large upfront commission fee.
Mr Tyler added that, "These fees can amount to thousands of pounds, and the mortgage lender makes no guarantee that in return they will lend money to the broker's client."
Mr Tyler therefore advised the commercial mortgage brokers who in the past have gone through such experiences not to get involved with the mortgage lenders in question ever again, additionally citing that his association takes a "very dim view" of lenders who try to "extort" money from mortgage brokers and their clients in this way.
This is prudent advice from the Chief Executive of the National Association of Commercial Finance Brokers (NACFB), and advice which in these economically challenging times mortgage brokers would do well to listen to.
The attitude of the lenders is poor but is an accurate reflection of what is going on in the financial market. With the unusually high LIBOR rate (London Inter Bank Offer Rate – the rate at which banks lend to each other), banks and other financial institutions including mortgage lenders are finding it hard to acquire cheap finance from other banks as was the norm in the boom a year ago. The problem follows that if they are unable to borrow money, they are unable to lend money; if they are unable to borrow money at a decent rate, they will have to increase their lending rates. We have experienced the knock on effect of the high LIBOR a lot over the previous few weeks, with many mortgage lenders removing their products, many increasing their lending rates and their lending criteria; the fact that they have asked for higher upfront commission fees is just another sign of the liquidity problem and reinforces the fact that the credit crunch is here to stay, for the time being anyway.
About the National Association of Commercial Finance Brokers (NACFB)
The National Association of Commercial Finance Brokers (NACFB) was commissioned back in 1992 to help maintain the high standards of professional practices in the commercial broker industry.
As a way of safe guarding the integrity and future well being of the commercial broker market, the association has published its own Code of Practice which has been adopted by its members countrywide. These come in handy in providing legislation to the lease and asset finance and mortgage brokers.
The National Association of Commercial Finance Brokers also works hand in hand with its members by offering training and advice to the consumers, workers and employees of the various associations.
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