Commissions – The Drive Towards Transparency

The Court of Appeal recently considered two appeals concerning the payment of commissions by lenders, and the ruling of the Court has caused some serious fluttering in the dovecots. Hailed as providing much needed clarity to the lending industry, it has not been received warmly in some quarters.

Firstly, it's important to stress that there is nothing objectionable to the payment of commissions by lenders to brokers. Commissions to agents and brokers are an everyday fact of life; it's how they make a living. The problem, however, is that in many instances brokers are seen as having divided loyalties particularly where he obtains a broker fee from the client and commissions from the lender.