Mortgage brokers should check the financial situation of their network to ensure they are well placed to weather the current economic climate, according to Sally Laker, managing director of Mortgage Intelligence.
She says brokers should make themselves aware of the financial stability of their network or risk the possibility of losing proc fees.
Laker says networks with sound finances should be happy to let their members know about their current situation, and if they do not, then brokers should consider why they are not being given this information.
“A broker who belongs to a network, or is considering joining one, should make sure they check the accounts and profitability of the firm,” she says.
“I suspect that some networks have been making very little profit or just breaking even. If they can’t make a decent profit during the boom times we’ve just had then they are unlikely to weather these more difficult times.”
Brokers could lose proc fees they have yet to receive if their network goes into administration, according to Laker, as the administrators will immediately lock down all assets to repay the firm’s creditors.
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